What is reference currency in SAP FI - Financial Accounting?

SAP Term: reference currency

• Component: FI

• Component Name: Financial Accounting

• Description: A currency key with which all exchange rate calculations are made for the exchange rate type being used.

Smart SAP Assistant

• Key Concepts: 
  Reference currency is a feature in SAP Financial Accounting (FI) that allows users to define a currency as the reference currency for a company code. This reference currency is used to store and display all financial data in the company code. It is also used to convert foreign currencies into the reference currency. 
  
  How to use it: 
  To set up a reference currency, go to the SAP Easy Access menu and select Financial Accounting > Financial Accounting Global Settings > Company Code > Define Company Code. In the Company Code Data window, select the Currency tab and enter the reference currency in the Reference Currency field. 
  
  Tips & Tricks: 
  When setting up a reference currency, it is important to ensure that all foreign currencies are converted into the reference currency before they are stored in the system. This will ensure that all financial data is consistent and accurate. 
  
  Related Information: 
  For more information on setting up a reference currency in SAP FI, please refer to SAP Help documentation at https://help.sap.com/viewer/product/SAP_ERP_Financials/6.0_SPS12/en-US/f3d7f9a8b2e04c8a9f3d7f9a8b2e04c8a9f2d-8000.html