What is the Unit of Measure Concept?

The unit of measure concept is a standard convention used in accounting, under which all transactions must be consistently recorded using the same currency. For example, a business maintaining its records in the United States would record all of its transactions in U.S. dollars, while a German company would record all of its transactions in Euros. If a transaction involves receipts or payments in a different currency, the amount is converted to the home currency used by an organization before being recorded. Without a common unit of measure, it would be impossible to produce financial statements.