These three elements are local currency, foreign currency and time. 1. functional currency: functional currency is the same indicator to measure the effect of an international economic transaction. Foreign currency receipts and payments shall be settled in the bookkeeping base currency, and its operating results shall be assessed.

2. Foreign currency: any international economic transaction must involve the receipt and payment of foreign currency.

3. Time: In international economic transactions, the actual receipt of accounts receivable, the actual payment of accounts payable and the final repayment of loan principal and interest all have time factors. In a certain period of time, the exchange rate between foreign currency and local currency will change, resulting in foreign exchange risks.