6 Work with Journal Entries with Foreign Currency

This chapter contains these topics:

You can enter amounts in either a foreign or the domestic currency. Foreign transactions are entered in a currency that is different from the base currency associated with the company. The system converts them to the domestic currency at the time of entry. You can also enter the domestic amount of a foreign transaction and have the system calculate the foreign amount.

Foreign currency journal entries have two different currency code fields:

  • Base Co. Currency Code. The document company determines the base company currency code. If you do not enter a document company, the system supplies the default document company and its associated base currency code based on the business unit in the first account number entered for the journal entry.

  • Transaction Currency Code. The transaction currency code indicates the currency denomination for the amounts originally entered for a transaction. If the transaction currency code is blank, the base currency code applies.

6.1 Entering Journal Entries with Foreign Currency

Navigation

From General Accounting (G09), choose Journal Entries

From Journal Entry, Reports, & Inquiries (G0911), choose Journal Entry

Figure 6-1 Journal Entry screen

Description of Figure 6-1 follows
Description of "Figure 6-1 Journal Entry screen"

6.1.1 What You Should Know About

Topic Description
Ledger types The system writes foreign transaction amounts to the CA (currency amounts) ledger and domestic amounts to the AA (actual amounts) ledger. If you use detailed currency restatement, it also creates transactions in the XA (detailed restatement amounts) ledger. The ledger type indicates which ledger or set of books is updated by the transaction.
Exchange rates The system uses an exchange rate from the exchange rate table using Set Daily Transaction Rates unless you enter an exchange rate on the Journal Entry form. Do this only to override the rate that is already set up for the currency.
Default Journal Entry Sever (XT0911Z1) options The currency processing options allow you to certain controls when entering foreign journal entries. You may choose to:

  • Edit the exchange rate Effective Date period against the G/L period for the transaction.

  • Specify tolerance limits when manually overriding the exchange rate.

  • Disallow entry to the domestic side of a foreign transaction.

See Also:

To enter a journal entry with foreign currency

On Journal Entry

  1. Follow the steps to enter a basic journal entry.

  2. Complete the following fields:

    • Currency Code

    • Exchange Rate (optional)

  3. Access the detail area to view the ledger type.

Figure 6-2 Journal Entry screen's Detail Area

Description of Figure 6-2 follows
Description of "Figure 6-2 Journal Entry screen's Detail Area"

Field Explanation
Currency Code A code specifying the currency of the transaction. This can be any code defined on the Designate Currency Codes form.

Note: This currency field only applies to AA and CA ledger types when posting by currency is activated.

Form-specific information

If you leave this field blank, the system supplies the company currency code associated with the account number of the first detail line for the journal entry.
Exchange Rate The conversion rate that the system uses to convert foreign currencies to domestic currencies. If the Multi-Currency Conversion option on the Set Multi-Currency Option form is set to Y, this rate is a multiplier. If it is set to Z, this rate is a divisor.

Form-specific information

If you leave this field blank, an exchange rate is supplied from the Exchange Rate table on the Set Daily Transaction Rates form.

If you enter a transaction using an alternate currency, you can specify a spot exchange rate for the AA to XA calculation. The spot rate overrides the default exchange rate if the processing option is set to allow this.

6.2 Locating Journal Entries with Foreign Currency

To locate a journal entry with foreign currency

You can locate journal entries and review the amounts in both the base and the transaction currency.

On Journal Entry

  1. Complete the following fields:

    • Document Type

    • Document Number

  2. Review the following field:

    • Base Company Currency

  3. Change the following field (optional):

    • Mode

  4. Access the detail area to review the ledger type for the displayed currency.

Field Explanation
Base Company Currency A code that indicates the domestic currency of the company the account is associated with, as defined on the Designate Company Currency form.
Mode A code that specifies whether amounts are in the domestic currency of the company the account is associated with or in the foreign currency of the transaction. Valid codes are

D – Domestic

F – Foreign

Form-specific information

If you enter:

F – Foreign amounts appear, and the default ledger type is CA

D – Domestic amounts appear, and the default ledger type is AA

If you use detailed currency restatement, these codes apply:

X – Transactions in the XA ledger

Y – Transactions in the YA ledger

Z – Transactions in the ZA ledger