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Denomination is a proper description of a currency amount, usually for coins or banknotes. Denominations may also be used with other means of payment like gift cards.

Contents 1 Subunit and super unit 2 Decimal v.s non-decimal 3 Choice of name 4 Redenomination 4.1 Inflationary 4.2 Monetary union 4.3 Decimalisation 4.4 Book keeping 5 See also

In a currency system, there is usually a main unit(base), and a subunit that is a fraction amount of the main unit. In some countries, there are multiple levels of subunits. In the Ottoman Empire, 1 lira = 100 kuruş = 4000 para = 12000 akçe. Today, only a few places use this practice, notably Chinese speaking regions: mainland China (renminbi), Hong Kong (Hong Kong dollar), and Republic of China (New Taiwan dollar). In addition, Jordanian dinar is divided into 10 dirham, 100 qirsh/piastres, or 1000 fils. Many countries today where Western European languages are spoken have their main units divided into 100 cents or derivatives of the word cent.

Occasionally, a super unit is used as multiples of the main unit. Examples include Korean whan = 5 yang in 1893, Iranian toman 10 rials (used informally today). In the Ottoman Empire, lira and kuruş were super units at some point before becoming the main unit.

A decimal currency is a currency where the ratio between the main unit and the subunit is an integral power of 10. Non-decimal currencies have the advantage in daily life transactions. For example, 1 South German Gulden = 60 Kreuzer. 60 Kreuzer can be divided into 2, 3, 4, 5, or 6 parts that are still integers, making pricing easy. The underlining difference is that 60 has a higher density of divisors (¹²⁄₆₀ = 20%) than 100 (⁹⁄₁₀₀ = 9%). The main reason why many currencies before modern times were non-decimal is because the main units at that time were often quite large and computers were not invented yet.

It is common to name a unit with a unit of weight, such as pound, lira, and baht. These currencies are usually originally defined as that amount of some precious metal. Another choice of name is some form of derivative of the political entity. Afghan afghani and euro fall into this category. Sometimes the name is simply the name of the metal, of which the coins are made, such as Polish złoty and Vietnamese đồng.

Due to inflation, the same amount of monetary units have continuously decreasing purchasing power. In other words, prices of the same products or services must be expressed in higher numbers. When prices reach a certain point, the high numbers can impede the well being of daily transactions because of the risk and inconvenience of carrying stacks of bills, strain on systems, e.g., automatic teller machines (ATMs), and because human psychology does not handle large numbers well. To address this problem, authorities can alleviate it through the process of redenomination. Redenomination is the process where a new unit replaces the old unit with a certain ratio. If inflation is the reason for redenomination, this ratio is some number larger than 1, usually a positive integral power of 10 like 100, 1000 or 1 million. Recent examples include

New unit	=	x	Old unit	year
Revalued Zimbabwean dollar	=	1000	old dollars	2006
New Mozambican metical	=	1000	old meticais	2006
This table is not exhaustive.

Although the ratio is often a positive integral power of 10, sometimes it can be a×10ⁿ where a is a single digit integer and n is a positive integer. Partial examples include

New unit	=	x	Old unit	year
Chinese "gold" yuan	=	3 million	old yuan	1948
Chinese "silver" yuan	=	500 million	"gold" yuan	1949
New Taiwan dollar	=	40,000	old dollars	1949
Azerbaijani new manat	=	5000	old manat	2006
This table is not exhaustive.

Occasionally, the ratio is defined in a way such that the new unit is equal to a hard currency. As a result, the ratio cannot be a nice even numbers. Examples include

New unit	=	x	Old unit	=	Anchor currency	year
Brazilian real	=	2750	cruzeiro reais	=	United States dollar	1994
Yugoslav novi dinar	=	10~13 million	1994 dinara	=	German mark	24 January 1994
This table is not exhaustive.

In the case of hyperinflation, the ratio can go as high as millions or billions, to a point where scientific notation is used for clarity or long and short scales are mentioned to disambiguate what kind of billion/trillion is meant.

In the case of chronic inflation or regular inflation, the authorities have a choice: a large redenomination ratio or a small redenomination ratio. When using a small ratio, more redenomination processes must be carried out in the long run. And each occurrence incurs costs of productivity in the financial, accounting, and computing industry. As a result, small ratio has the disadvantage of more cost associated to the changeover. However, the period of prices with large number can be shortened with a small ratio.

During a redenomination process, the new unit is often the same as the old unit, with the addition of the word "new". The word "new" may or may not be dropped a few years after the change. Sometimes the new unit is a completely new name, or a "recycled" name from previous redenomination or from ancient times.

New unit	=	x	Old unit	year	Nature of the new unit
Turkish new lira	=	1 million	old lira	2005	"new" is an official designation and will be dropped in 2009
New Taiwan dollar	=	40,000	old dollars	1949	"new" is an official designation and is still used in official documents today
Argentine austral	=	1,000	Peso argentino	1985	completely new name
Yugoslav 1993 dinar	=	1 million	1992 dinara	1993	no official designation
Brazilian real	=	2750	cruzeiro reais	1994	recycled unit of Brazil before 1942
This table is not exhaustive.

When countries form a monetary union, redenomination may be required and the conversion ratio is often not a nice even number, or even less than 1.

New unit	=	x	Old unit	year	Monetary union
Austro-Hungarian krone	=	0.5	gulden/forint	1892	Latin Monetary Union
euro	=	0.787564	Irish pound	1999/2002	Eurozone
euro	=	40.3399	Belgian or Luxembourgian francs	1999/2002	Eurozone
This table is not exhaustive.

In many countries where an £sd system (£1 = 20 shillings = 240 pence) is used, the process of decimalisation was carried out. While they were at it, some chose to change the main unit as well. By defining 1 dollar = £0.5 = 100 cents, 1 shilling would conveniently turn into 10 cents. This is also a prime example where the ratio is less than 1.

New unit	=	x	Old unit	year
German gold mark	=	1/3	Vereinsthaler	1873
South African rand	=	0.5	South African pound	1961
Australian dollar	=	0.5	Australian pound	1966
New Zealand dollar	=	0.5	New Zealand pound	1967
This table is not exhaustive.

When redenomination occurs, financial data that spans across the change must be presented with proper annotation. Otherwise, the data could give the illusion of astronomical change. For example, the GDP reported by the Central Bank of Nicaragua is properly documented.

• Least valued currency unit
• Highest valued currency unit
• Devaluation
• Inflation
• Chronic inflation
• Hyperinflation
• Decimalisation
• Decimal currency
• Non-decimal currencies
• Denomination (postage stamp)