Exchange rates

You set up and control the exchange rates for various currencies. When you enter a transaction, the system retrieves the exchange rate or, if necessary, you can override the rate.

Exchange rate methods

You set up the exchange rate method for each currency relationship.

All programs that calculate and use exchange rates use the multiplier or divisor method (also called inverse method) or the no inverse method of exchange rate calculation. Additionally, all programs can calculate an exchange rate through a third currency using the triangulation method.

Transaction entry

When you enter a transaction, the system compares the currency of the transaction with the currency of the company. If the transaction currency is different from the company currency, it is considered a foreign transaction. The system converts foreign amounts to domestic amounts based on the currency of the transaction and the company with which the transaction is associated.

Enter invoices, vouchers, and other transactions in the original (or transaction) currency in which you receive or send them, regardless of whether the currency is a domestic or foreign currency. For receipts and payments, you can use an alternate currency as well.

Alternate currency processing

With alternate currency processing, you can receive payment in any currency and apply the receipt without having to void the original invoice and create a new invoice in the payment currency. The same applies to payments that you issue.

As if currency

You can view transaction amounts as if they were stored in a currency other than the currency in which they were actually entered. Regardless of whether the original transaction was entered in a foreign or domestic currency, this currency processing enables you to review transaction amounts in an alternate currency.

Gains and losses

When you make or receive a payment, the system uses the current exchange rate to realize a gain or loss. It realizes a gain or loss if the exchange rate changed between the time an invoice or voucher was entered and the time a payment was made or received.

Currency revaluation

Use the currency gains and losses reports to revalue open transactions at the end of a period. You can also revalue monetary (currency-specific) accounts using a program that creates journal entries for unrealized gains and losses.

Currency restatement

Before you run financial reports at the end of a period, you can:

• Restate account balances for companies with different base currencies into one currency for consolidated reporting in one currency

• Restate amounts at the transaction level

• Restate foreign transactions at a new exchange rate for analyzing budgets and job costing

Consolidated reporting

Consolidated reporting enables you to:

• Automatically calculate translation adjustments when restating foreign subsidiaries into the currency of the parent company.

• Select the exchange rate from the average period, period end, period beginning, historical, or budgeted exchange rate. This choice gives you maximum flexibility for currency restatement.

• Simplify compliance with directives such as Statement of Financial Accounting Standard (SFAS) 52 and International Accounting Standards (IAS) 20 by maintaining entries that are based on both local accounting practices and the accepted accounting practices of the parent company.

Highly inflationary economies

You can maintain dual sets of books in highly inflationary economies—one in the local currency and one in a stable currency.

Flexible reporting capabilities

Reports and inquiries provide information to help you analyze balances for many different currencies. For example, you can analyze currency exposure and detailed bank account activity by the originating currency.

Account balances by currency

You can control which account balances to store by currency. You specify the accounts by company and ranges of account numbers.

As if reposting

As if reposting eliminates rate fluctuations for budgetary analysis by restating foreign transactions as if they had been entered using the exchange rate from the same date.

Bank statement processing

Some countries have banking practices that rely heavily on magnetic media processing, electronic fund transfers, and direct bank involvement in the settlement of outstanding debts. For these countries, the bank statement serves as a source document for all banking activity. To enter and reconcile the transactions that appear on bank statements, you use bank statement processing.