The aim of the paper was to research the impact of the introduction of the euro as the official currency in the Republic of Croatia to the accounting of financial institutions. The paper describes what are specifics of accounting of financial institutions, i.e. credit institutions, investment funds and insurance companies. The paper also describes legal framework of accounting of financial institutions and basic reports which are compiled by financial institutions. The paper describes IAS 21 Effects of changes in foreign exchange rates as an important standard in process of changing currency. Certain procedures in the process of introducing the euro and roles of certain stakeholders in that process are further explained. Also, the paper describes the benefits and costs that the introduction of the euro brings for Republic of Croatia. At the end of the paper is analyzed the impact of the introduction of the euro on financial institutions and their accounting records and financial statements. At the end of the paper is wrote conclusion about how entry into the euro area contributes economic development of the country. Conclusion is that numerous benefits are expected from the introduction of the euro, where it is the most important one is the elimination of currency risks. However, certain costs are also expected, where it is the most significant one is the loss of independent monetary policy. Other costs are detected as one-time nature costs, so they will not have a significant impact. Also, some conclusions are related to the impact of the introduction of the euro on the accounting of financial institutions and their records business events and financial statements. Thus, it was concluded that the impact of the introduction of the euro will reflected at the currency of presentation of financial statements. Also, it is expected that, after the euro becomes official national currency, there will be some changes in the records that have so far been shown in euros as a foreign currency. It is important to write out that the banks will have to convert cash, deposits, loans and securities of their clients in their accounting records. It will contribute to the conversion process in the accounting systems of financial institutions.