Unlike the lyrics of Jessie J’s excellent song "Price Tag" this blog is all about the money. With the role out of our Rest of World research reporting (excluding North America) from January 2013, we have had to think about how best to describe and show currencies and what monetary systems we will use.
Going forward we have decided to follow the Economist Style Guide’s advise and use US Dollars ($) as standard currency outside Europe (at least until the yuan takes over as the global currency). For our European Research we are sticking to the Euro. We will always provide you with the local currency amount in the news or research followed by a conversation into Dollars or Euro in brackets after. For example in Europe we will convert Swedish Krona to Euro as follows: SEK 691 million (€81.0 million). While Japanese Yen will be converted into Dollars: 400 billion yen to 500 billion yen, (approximately $5 billion to $6 billion).
If we do not spell out the currency in full i.e. Swiss Francs or Indian Rupees we will use the currency code, available at XE.com. This is easier than using such symbols as RM (Malaysia Ringgit) or ﷼ (Iran Rial) , which may be unfamiliar and are harder to search for. Twenty four countries use “Dollars” and many of these use the $ currency symbol, for this reason and to avoid confusion we will always use the currency code for all of these countries save for the United States Dollars, which will be shown as $.
To convert currencies we always, where possible, use Oanda’s currency converter http://www.oanda.com/currency/converter/. If we are talking about an annual figure then we use the websites historical exchange rates. This provides the period average based on the year range from the 1st January to the 31st December. The Interbank rate is set at 0%, the price at midpoint and the frequency daily.
Using these criteria for example, in the period between 1st January 2011 to 31st December 2011, the average value of $1 was 0.6231 GBP, €0.7178 and 79.73 JPY.
Financial statements are converted on the same basis but on the date that they are published or for the period that they cover depending on which is most appropriate.
Some monetary systems may initially be unfamiliar, for example India with its use of lakhs, lacs and crores. An understanding of these is integral to the understanding of many Indian research document or company accounts so we will be using them in our research. Easycalculation provides a useful conversation tool.
- One Lakh equals 100,000 Indian rupees.
- A Lac is a million Indian rupees or 10 Lakhs
- A Crore is ten million Indian rupees, 10 times a Lac and 100 times a Lakh.
We will not however be using the Indian number system which shows a Crores as 1,23,45,678, or the Swiss approach 1'234'567.89 or that used in many European countries 1.234.567,89 but rather using a dot "." to mark the radix point. All systems that do not use Arabic numerals we will translate.
As ever we intend to follow George Orwell’s suggestion “to break any of these rules sooner than saying anything outright barbarous.”