AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
An Irish company keeps its books in its functional currency, the currency of the economic environment it mainly operates in, which for most Irish companies is the euro; naira transactions are recorded in euro at the rate on the transaction date. A Nigerian subsidiary keeps its own books in naira, and its results are translated into euro when the group reports. IAS 21 sets these rules; ask your accountant which framework your company applies.
Two currencies, two questions
Every company with dealings in a second currency has to answer two separate questions. The first is what its functional currency is: the currency it thinks in. The second is how amounts in other currencies get into those books. Mixing these up is the most common reason two-currency books stop balancing.
The rules below come from IAS 21, the international standard on foreign exchange. Irish companies report under a framework their accountant chooses, and the frameworks in use deal with the same questions; confirm the exact rules for yours. For tax, Revenue charges Corporation Tax on an Irish-resident company's worldwide profits, so naira income and costs end up in the Irish computation either way.
Choosing the functional currency
IAS 21 (paragraphs 9 to 12) looks first at the currency that mainly influences sales prices and costs: what you price in and pay wages and suppliers in. It then looks at the currency in which financing is raised and receipts are retained. If the signs are mixed, management uses judgement. The functional currency changes only when the underlying conditions change, and a change is applied from that date forward.
| Situation | Likely functional currency |
|---|---|
| Dublin company selling to EU clients, Irish staff, an occasional Nigerian supplier | Euro |
| Dublin company whose sales and costs are mostly in naira through a Lagos team | Needs judgement under paragraphs 9 to 12; get advice |
| Lagos subsidiary selling and paying staff in Nigeria | Naira, in its own books |
Recording naira transactions in euro books
When an Irish company with a euro functional currency buys from a Lagos supplier or invoices a Nigerian client in naira, it records the transaction in euro at the rate for that date. Balances still owed in naira at the year end, such as a debtor or a naira bank balance, are restated at the closing rate, and the difference goes through profit or loss. Our guide to which exchange rate to use covers the choice of rate source.
Worked example (illustrative rates)
On 1 March an Irish company invoices a Nigerian client ₦8,000,000. At an illustrative rate of ₦1,600 to €1, it records revenue and a debtor of €5,000. On 30 April the client pays the ₦8,000,000, and the company converts at an illustrative ₦1,700 to €1, receiving €4,705.88. The €294.12 shortfall is a realised exchange loss. The revenue stays at €5,000; the movement is recorded separately as a currency item.
Translating a Nigerian subsidiary
A Nigerian subsidiary keeps naira books, and the Nigeria Tax Administration Act 2025 (section 31) requires records in English, kept for at least six years after the year of assessment. When the Irish group prepares accounts in euro, IAS 21 paragraph 39 translates the subsidiary's assets and liabilities at the closing rate, and income and expenses at the rates on the transaction dates. Paragraph 40 allows an average rate as a practical shortcut, but says it is inappropriate if rates fluctuate significantly. The resulting differences go to other comprehensive income, and are moved to profit or loss when the subsidiary is sold (paragraph 48).
Presentation currency is a separate choice
The currency in which accounts are presented need not be the functional currency. A Nigerian subsidiary measures its results in naira; the group presents in euro. If the Irish company ever prepares a naira version of its accounts for a Nigerian bank or regulator, that is a presentation choice and does not change how the books are kept. Keep the underlying ledgers in the functional currency, and treat any other-currency version as a translation of them.
Practical set-up
- Keep separate bank ledgers for each currency account, and record the euro value of each naira movement on the day.
- Decide in writing which rate source you use, and use it every time.
- Invoice in one currency per contract, and say in the contract which one.
- Keep intercompany balances with the subsidiary reconciled monthly in both currencies, so the two sets of books agree. See charging a Nigerian subsidiary.
- Keep conversion confirmations as evidence; see record keeping.
For the mechanics of revaluation and realised gains in more depth, see foreign currency accounting.
Where Pryme fits
With a Pryme Business Account, euro and naira sit in separate balances, and each Swap conversion shows the rate and the fee before you approve. That gives you a dated rate for each conversion to put in your books. The Finance agent can prepare a monthly two-currency reconciliation for a person to review.
Questions people ask
What currency should an Irish company keep its books in?
Its functional currency, the currency of its main economic environment. For most Irish companies that is the euro, but IAS 21 asks you to look at what drives prices, costs and financing.
Can a Nigerian subsidiary keep its books in naira?
Yes. The subsidiary keeps naira books, which Nigerian law requires to be in English and kept for at least six years, and the group translates them into euro.
Where do naira exchange gains and losses go?
For transactions in euro books, settlement and year-end restatement differences go through profit or loss. Translation differences on a foreign subsidiary go to other comprehensive income under IAS 21.
Is Nigeria hyperinflationary for accounting?
IAS 29 uses a benchmark of about 100% cumulative inflation over three years. NBS headline inflation was 14.63% in September 2026; check with your accountant each year.
Sources
- IFRS Foundation: IAS 21 The Effects of Changes in Foreign Exchange Rates (2026 text) · accessed Oct 2026
- IFRS Foundation: IAS 29 Financial Reporting in Hyperinflationary Economies · accessed Oct 2026
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- Voice of Nigeria: Headline inflation drops to 14.63 per cent (16 Oct 2026) · accessed Oct 2026
- Revenue: Corporation Tax (published 16 Oct 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.