Using Multiple Currencies

This chapter provides overviews of multiple currencies and how multiple currencies are processed, and discusses setting up multiple currency rules.

Understanding Multiple Currencies

This section discusses:

• Multiple currencies.

• Currency quotation methods.

• How exchange rates are calculated.

Prerequisites

Before you begin using multiple currencies in Planning and Budgeting, understand how foreign currency processing works in PeopleSoft applications and how to set up your system for multiple currencies. You can define and maintain tables that describe currency codes, exchange rates, market rates, and currency rate types. All PeopleSoft applications use the same market rate and currency pages and tables, enabling you to administer centralized currency controls throughout our integrated product lines.

Multiple Currencies

The PeopleSoft system enables you to manage financial information in multiple currencies for standard, project, and control budget types.

Planning and Budgeting supports multiple entry and target currencies. Use an entry currency to enter budget data. A target currency is a currency into which you can translate, report, and view monetary amounts within the planning model.

Planning and Budgeting uses the multiple currency setup and transactions that you completed in PeopleSoft Financial Management. Use the extract, transform, and load (ETL) process to import related data into the PeopleSoft EPM Warehouse tables. If you are not using PeopleSoft General Ledger, you can set up multiple currency processing within the PeopleSoft Enterprise Performance Management database.

Multicurrency affects data in Planning and Budgeting when you:

• Stage data for the planning model.

• Work with line item budgeting, asset budgeting, and position budgeting.

• Refresh exchange rates in the planning model.

• Export budget data from the planning model.

• Use Analytical Calculation Engine (ACE) analysis reports and SQR reports.

Once budget development is complete, post budget journal entries in PeopleSoft General Ledger.

See Also

PeopleSoft General Ledger PeopleBook, "Processing Multiple Currencies in PeopleSoft General Ledger".

PeopleSoft Global Options and Reports PeopleBook, "Processing Multiple Currencies".

Currency Quotation Methods

Define and maintain currency quotations within PeopleSoft Financial Management or as part of PeopleSoft EPM Warehouse setup. This table shows the direct rate quotation that Planning and Budgeting uses to convert and manage multicurrency processing:

In Planning and Budgeting, the system calculates exchange rates with a model based on the currency criteria defined for the planning model. After the budgeting process begins, run the Update Staged Data Application Engine process (BP_STG) to load and update exchange rates and revalue entry-target currency rates in a planning model.

Note. Planning and Budgeting uses the direct rate quotation but does not use other conversion types that are available in the EPM Warehouse, such as indirect and triangulation.

How Exchange Rates Are Calculated

Planning and Budgeting uses effective-dated exchange rates to convert historical ledger and asset data and to generate exchange rates to view budget data. The initial source of exchange rates comes from the PS_RT_RATE_TBL table. Planning and Budgeting uses three exchange rate concepts:

• Average period rate.

• Average rate for a budgeting cycle.

• Effective dates.

Average Period Rate

The first concept is the average period exchange rates, which are calculated for each budget period that is used by the planning model and is stored in PS_BP_ACTV_SCEN_RT. For example, if the planning model is monthly, contains two years of historical data, and defines one year for a proposed budget, you need 36 exchange rates for entry-target currency. If the planning model uses quarterly budgets instead, each entry-target currency would use 12 exchange rates (three years multiplied by four quarters). The model uses these exchange rates for entry-target currency views in line item, inquiry, reporting, and the exporting of data from the planning model.

Use the following examples to look at how the system derives these values. The process takes effective-dated rates and converts them into average period rates prorated by number of days. For example, suppose that you have the following rate data in the PS_BP_ACTV_SCEN_RT:

Assuming that the planning model is built for a proposed one-year budget, with monthly periods of January through December, the process must calculate an average rate for each month required for the planning model.

Based on the data that is presented in the table, the following shows how to calculate the average rate for the month of February 2001. February 2001 has 14 days (2/1/2001 to 2/14/2001) using the 1.45 rate, which is effective from 12/13/2000. Another 14 days within the month of February 2001 (2/15/2001 to 2/28/2001) use the 1.47 rate, which is effective from 2/15/2001. The average rate for the month of February 2001 is as follows:

((14 days × 1.45) + (14 days × 1.47)) ÷ 28 days = (20.30 + 20.58) ÷ 28 = 1.46

The system stores the derived average period rate in the PS_BP_ACTV_SCEN_RT table by planning model, scenario, period, account type, and analysis base. This example is intended for illustrative purposes only and does not consider actual currency precision.

Average Rate for a Budgeting Cycle

The second exchange rate concept derives a single average rate for the budgeting cycle. The system uses this exchange rate for any conversion that might be required on position data from human resources to be included in the planning model.

To illustrate, assuming that the start and end dates of the budgeting year are 1/1/2001 to 12/31/2001, the system process must derive one average rate for the entire budget year. Using the same data presented earlier, the following shows how to calculate the average annual rate for the 2001 budgeting cycle. There are 45 days between 1/1/2001 to 2/14/2001 using the 1.45 rate, which is effective from 12/13/2000. Another 320 days from 2/15/2001 to 12/31/2001 use the 1.47 rate, which is effective from 2/15/2001. The average annual rate for the budget year is:

((1.45 × 45 days) + (1.47 × 320 days)) ÷ 365 days = 65.25 + 470.40 ÷ 365 = 1.4675

The system stores the derived average rate for position data in the PS_BP_POS_RATE table by planning model, scenario and account type.

Effective Dates

To convert historical data, the system uses the exchange rates based on the scenario and the scenario group to define average budget period rate and average budgeting cycle rates. These rates are used to convert ledger or asset data by average budget period rate, and position data using the average exchange rate of the budgeting cycle, during staging when the original currency is unavailable for entry in the planning model.

Using the earlier example, if the budget uses Calendar Year 2001 for comparison purposes or source data (defined by a history scenario), the historical data requiring conversion will use the effective dates of 12/13/2000 and 2/15/2001 to create the average budget period and average budgeting cycle rates.

Understanding How Multiple Currencies Are Processed

This section provides overviews of how multiple currencies are processed during:

• Line item budgeting.

• Asset budgeting.

• Position budgeting.

• Data staging.

• Model update.

• Inquiry and reporting.

• Data export.

• Ledger posting.

Line Item Budgeting

During line item budgeting, you can view up to nine historical monetary amounts with the proposed budget and forecast planning types that you define when you setting up the planning model. View these historical and proposed amounts in any target currency. Define your view using the View Definitions page. When you are working with line item budgets, Planning and Budgeting performs online conversion of the ledger data to target currencies using exchange rates by period.

How Exchange Rates Are Used

Planning and Budgeting uses rates that are stored in the PS_BP_ACTV_SCEN_RT table, which was derived when the staging process was run before the planning model was published.

Planning and Budgeting converts the monetary amounts to the target currency; it does not use the total amount as the basis for the conversion. Rather, it converts the data period-by-period using historical rates, and then adds the amounts to provide a total in the target currency.

For example, suppose that you have the following exchange rate data:

Note. The Rate column represents the value derived from PS_RT_RATE_TBL when the RATE_MULT (rate multiplier) field is divided by the RATE_DIV (rate divisor) field.

After the stage process runs, it updates the PS_BP_ACTV_SCEN_RT table. For a monthly budget, the following represents the values in the table for rate data by budget period that line item budgeting uses:

Suppose that you want to view the prior year actuals analysis base total in British pounds (GBP). Currently, the prior year actuals appear in U.S. dollars (USD) as shown here for account 5000:

Based on this example data, using a monthly budget the system converts the prior year actuals analysis base total using the following formula with the following results:

Note. If you are using activities that include Balance Sheet Planning, the period 0 (starting balance) rate will be based on the minimum effective date rate for the planning scenario you are working with. Using the example above, it would be 1.45 for a budget scenario that begins 1/1/2001.

Asset Budgeting

During the staging process, for in-service assets that use currencies that are not defined as entry currencies, the system converts asset values with the exchange rate using the average budget period rate. This is the same methodology that is used by line item budgeting data.

When you use the asset budgeting activity, the entry currencies that are defined by the planning model are available for adding new assets.

Position Budgeting

When you use the position budgeting activity, only the entry currencies that are defined by the planning model are available for adding positions. A single currency code is associated with a job code when adding a position, and it cannot be changed when entered. When existing positions have currencies that are not defined as an entry currency, they are converted during staging into the planning model using the average exchange rate of the budgeting cycle in the model. Currency codes for existing position and job rows cannot be changed during the edit process.

Data Staging

When you run the Data Staging Application Engine (BP_STG)), the system uses ledger data that you import from your Financial Management Solutions database. Specifically, Planning and Budgeting takes the ledger values from POSTED_TRAN_AMT (posted transaction amount) located in PS_LED_F00 (actual ledger), PS_BP_LED_BUDG_F00 (standard budget ledger), PS_BP_LED_KK_F00 (control budget ledger), or PS_BP_LED_PROJ_F00 (project budget ledger).

During this stage, if the transaction currency of the source data is not defined as an entry currency for the planning model, the data staging converts the transaction amounts to the base currency of the business unit. For line item ledger data and asset data transaction, the conversion is based on the exchange rate as-of date. For position data transaction, the conversion is based on the average rate of the budgeting cycle.

Model Update

Use the Update Staged Data process and select the Update Exchange Rates function to update exchange rates that changed since the planning model was originally published. When you run this process, the system updates exchange rates and the average period rates for entry-target currency for a planning model and scenario that have already been staged. The update can impact new data entry and target currency viewing.

This process updates the exchange rates and stores them in PS_BP_ACTV_SCEN_RT for use during budgeting. The process takes the effective-dated rates and converts them into average budget period rates used in the model, prorated by number of days.

See Also

Building the Planning Model

Inquiry and Reporting

Planning and Budgeting enables you to define parameters to use the ACE analysis reports to view the results online or to download the results to a Microsoft Excel spreadsheet. Use the Select View Currency field to specify the currency. Available ACE analysis reports for line item budgeting include Version Analysis and Variance Analysis.

Additionally, use the standard delivered SQR reports with Planning and Budgeting. The reporting options enable you to compare line item budget activities within a version, across budget versions, and across budget periods using a defined entry or target currency when a planning model has enabled multicurrency options.

When entering budget selection criteria for the SQR reports, three currency inquiry options are available:

• All Entry in a Single Target

  You select which target currency to view or report all entry budget data.

• One Entry Only

  You select which entry currency code to view or report budget data.

• One Entry in a Single Target

  You first select the entry currency code and then select which target currency to view or report budget data.

Available SQR report options for line item budgeting include Version Analysis, Ledger Type Comparison, Budget Comparison, and Summary of Methods.

Note. Reporting options for multicurrency, line item budgeting, do not generate reports or views containing multiple target or multiple entry currencies.

See Also

Using Data from PeopleSoft Asset Management

Data Export

When you run the Export to General Ledger or Export to HR application engine process (BP_EXP), the system extracts budget data from the planning model into the general ledger stage table PS_BP_LEDGER_BDEXP for line item data (and one of the following source budget ledgers in EPM — BP_LED_BUDG_F00, BP_LED_PROJ_F00, or BP_LED_KK_F00), and for position-related data PS_BP_JOB_F00, PS_BP_POSITION_D00, and BP_COMP_F00.

For line item ledger data, the system exports budget amounts in the entry currency that is used during the budgeting process and saves them in POSTED_TOTAL_AMT and POSTED_TRAN_AMT. For POSTED_BASE_AMT, the system converts and saves the currency as the business unit base currency.

For data that is exported to human resources, the system exports position budget data amounts in the entry currency used during the budgeting process. For those positions originally converted to an entry currency when the source currency was unavailable, the system converts it to its original source currency.

Note. Asset activity data does not have a data export process like line items and positions.

Ledger Posting

After you import the budget data into the appropriate ledger tables in the PeopleSoft Financial Management database, you can use the Allocation process (GL_ALLOC) in PeopleSoft General Ledger to create journal entries that post the budget amounts in the POSTED_TOTAL_AMT (posted total amount) field in the base currency. The system may update or create new rows with the budget amounts in POSTED_TRAN_AMT converted to base currency and stored in the POSTED_TOTAL_AMT field.

Setting Up Multiple Currency Rules

To set up multicurrency:

1. Define the following multicurrency definitions when you set up the following general options in PeopleSoft Financial Management:

   • Currency codes.

   • Market rates.

   • Currency quotations.

   • Currency controls, including a base currency for the business unit.

   • Currency precision.

     Note. Alternatively, you can define these multicurrency definitions within the Enterprise Performance Management database; however, you cannot export these definitions back to the Financial Management database.

2. Use the ETL process to update the PeopleSoft Enterprise Performance Management database.

   The multiple currency tables that are used by all PeopleSoft applications are populated.

3. Import data to use in Planning and Budgeting.

4. Set up multiple currency options in Planning and Budgeting as you define your budgeting parameters and build the model.

   This step includes defining:

   • Rate combinations to associate market rate types with each account type that is assigned to a scenario.

   • The planning model as a multiple currency budget using the Planning Model page.

   • View definitions to specify how currencies appear on line item budgeting pages.

   • Currency options to specify entry, entry default, and target currencies for a planning model.

     Rate combination is an attribute of a nonhistory scenario. A planning model can have a unique rate combination for each scenario, since the model's scenario group can have many scenarios for planning and budgeting. This allows you to use scenarios for planning different assumptions about future exchange rates. All scenarios share the same currency option for entry, default, and target.

See Also

Building the Planning Model

Specifying Rate Combinations