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 the product documentation for PeopleSoft FSCM: General Ledger and PeopleSoft FSCM: Global Options and Reports
Currency Quotation Methods
Define and maintain currency quotations within PeopleSoft Financial Management or as part of PeopleSoft EPM Warehouse setup.
|
Conversion Type |
Formula |
Example |
|---|---|---|
|
Direct |
(From currency / RATE_DIV) × (RATE_MULT) = To currency |
10 USD to French Francs: (10/1) × 5 = 50 |
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:
|
From Currency |
To Currency |
Effective-Date |
Rate |
|---|---|---|---|
|
USD |
GBP |
12/13/2000 |
1.45 |
|
USD |
GBP |
2/15/2001 |
1.47 |
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.