2 Set Up Multi-Currency
This chapter contains these topics:
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Section 2.5, "Assigning Currency Codes to Monetary Accounts,"
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Section 2.6, "Assigning Currency Codes to Customers and Suppliers,"
2.1 Overview
If your company does business internationally, you work with different currencies. As part of working with different currencies, you need to be able to convert foreign currencies to domestic currencies, revalue currencies, and restate the amount into one common currency. Before you can perform these functions, you must set up your system for multi-currency accounting.
2.2 Activating Multi-Currency
From Multi-Currency Processing (G11), enter 29
From Multi-Currency Setup (G1141), choose a multi-currency option
Before you can use any of the multi-currency features, you must activate multi-currency. To do this, you need to determine which method to use for calculating conversions, and whether you allow journal entries between companies that have different base currencies.
The system maintains this information in the General Accounting Constants table (F0009).
On Set Multi Currency Option
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Figure 2-1 Set Multi-Currency Option screen
Description of "Figure 2-1 Set Multi-Currency Option screen"
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Complete the following fields:
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Multi-Currency Conversion
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Allow Multi-Currency Intercompany Journal Entries
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If you allow multi-currency intercompany journal entries, set the following constant to D:
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Intercompany Settlements
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2.2.1 What You Should Know About
| Topic | Description |
|---|---|
| Detailed restatement | If you use detailed currency restatement and you use the Accounts Payable or Accounts Receivable system, ensure that the constants for those systems reflect the detailed offset method. The system will then create an offset entry for each detail record. |
| Multi-Currency Conversion setting | JD Edwards recommends that you set your multi-currency conversion to a value of "Y" or "Z".
Caution: Once you choose a method you CANNOT change the method. |
2.3 Defining Currency Codes
In order for your currency amounts to reflect the correct decimal positions, you must define a currency code for each currency you work with. For each currency code, you also assign a program that converts amounts to words when writing payments.
After you define your currency codes, you can assign them to:
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Companies
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Monetary accounts (usually bank accounts)
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Suppliers and customers
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Ledgers types
The system maintains this information in the Currency Codes table (F0013).
2.3.1 How Are Currency Decimals Handled?
The following describes how decimals are handled in a multiple currency environment:
| Item | Description |
|---|---|
| Decimals for amounts that appear without a company number | Controlled by the data display decimals in the data dictionary. |
| Decimals for amounts in unit ledger types (ledgers ending in U) | Controlled by the data display decimals for the U field in the data dictionary. This field is not currency specific. |
| Decimals for transaction amounts in ledger type CA (foreign currency) | Controlled by the currency code assigned to the individual transaction. |
| Decimals for transaction amounts or balances that are not unit or CA ledger types | Controlled by the company currency code. |
| Decimals for foreign (CA ledger) summary amounts | Controlled by the first currency code associated with a particular total amount.
The system obtains the currency code according to the following sequence:
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| Totals on Reports | The decimal position for totals on reports follow the same rules as presented above. The currency code defined for the ledger type is the first determining factor. If that is blank, the currency of the company to which the last account is associated determines the decimal position. For summary amounts representing foreign currency in the CA ledger, the following rules apply:
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On Designate Currency Codes
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Complete the following fields:
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Currency Code
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Description
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A/P Payment Amount Text
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Display Decimals
| 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 Currency codes are normally three characters. JD Edwards World recommends that you use internationally accepted codes, such as those acknowledged by the International Standards Organization (ISO). |
| Description | A user defined name or remark that describes a field.
Form-specific information This is a description of the currency code. |
| A/P Payment Amount Text | The routine used by the A/P check writer program to convert numeric values to words. |
| Display Decimals | This parameter allows you to designate the number of decimals in the currency, amount, or quantity fields. For example, U.S. dollars would be 2 decimals, Japanese yen would be 0 decimals, and Cameroon francs would be 3 decimals. The entire data dictionary has been initially set up to conform to 2-decimal currencies. By changing the data dictionary, you can change the appearance of forms and reports to correspond to zero-decimal (yen) or 3-decimal (francs) currencies. |
2.4 Assigning a Domestic Currency to a Company
You must assign a domestic currency to each company in your organization. The system uses this information to maintain amounts in the AA ledger with the correct decimal positions for your domestic currency. The system also maintains amounts in the:
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XA (alternate currency) ledger, if you use detailed currency restatement
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CA (foreign currency) ledger, if you have foreign currency transactions
The system stores company currency information in the Company Constants table (F0010).
To assign a domestic currency to a company
On Designate Company Currency
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Complete the following fields:
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Currency Code
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Currency Balances
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Computation ID
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Detailed Currency Restatement
| 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 Use this field to assign a domestic currency to the company. |
| Currency Balances | A flag to denote that the system should post Account Balances table (F0902) records for this company by currency for accounts that are included in the account ranges specified in the AAI item PBCxx. |
| Computation ID | This character/number identifies the computation to be used for Balance Currency Restatement. You can apply a single computation to multiple companies. You can define multiple computation IDs for one company in the Currency Restatement program.
The computation ID value is set on Company Numbers & Names for each company. The system uses the company ID and the company code to identify the record. |
| Detailed Restatement | Y or Z in this field identifies the company as enabled for Detailed Currency Restatement processing (alternate currency). The Detailed Currency Restatement program (P11411) can create Account Ledger table (F0911) records for these companies in the XA ledger and, optionally, in the YA and ZA ledgers.
Y indicates the system will use multiplication when calculating the amount on the XA record. Z indicates the system will use division when calculating the amount. Form-specific information The value in this field should be the opposite of the value for multi-currency conversion in the general accounting constants. |
See Also:
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Section 35.3, "Setting Up Companies for Detailed Currency Restatement" for more information about the Designate Company Currency form, which is the same form as Company Numbers and Names.
2.5 Assigning Currency Codes to Monetary Accounts
For most general ledger accounts, you will want the system to accept a transaction in any currency. You do this by not assigning a currency code to the account. However, you might want an account to accept only transactions in a specific currency. JD Edwards World calls these monetary accounts. They are usually bank accounts. For example, if a German organization has a company whose currency is the Euro and the company has a U.S. bank account, you can assign US Dollars as the only valid transaction currency for that account.
Note:
Only enter a currency code for an account id it is something other than its company currency code.The system stores currency codes for monetary accounts in the Account Master table (F0901).
Note:
You cannot change the currency code on an account once transactions have been posted to it in the Account Balance table (F0902).To assign a currency code to a monetary account
On Designate Monetary Accounts
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Locate the monetary account that you want to assign a currency code to.
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Complete the following field:
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Currency Code
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2.6 Assigning Currency Codes to Customers and Suppliers
You need to assign a currency code to a customer or supplier only if the currency used for their invoices or vouchers is different from the currency of the company that they are doing business with. If you assign a currency code to a customer or supplier, the system supplies the code when you enter an invoice or voucher. You can override the code at any time during the creation of the Supplier or Customer Master. There is a processing option that you can set to designate the currency value to use in the amount currency field.
Additionally, you need to assign an amount currency code to a customer or supplier to designate in what currency their address book amount fields (such as credit limit, vouchered this year, and so on) are stored.
The system stores this information in the Customer Master (F0301) and Supplier Master (F0401) tables and optionally the Customer Master - Company/Business Unit Defaults (F03015) and Supplier Master - Company/Business Unit Defaults (F04015).
You assign currency codes to customers and suppliers on Designate A/R Currency and Designate A/P Currency, respectively. These forms are the same as Customer Master and Supplier Master.
To assign a currency to a customer or supplier
On Designate A/R Currency or Designate A/P Currency
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Complete the following fields:
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Currency Code
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Amount Currency
| Field | Explanation |
|---|---|
| Currency Code | A code that indicates the currency of a customer's or a supplier's transactions.
Form-specific information The currency you specify is used as the default value when you entering invoices. You can override this code during invoice or voucher entry. |
| Amount Currency | The currency in which amounts are stored in the address book. For example, the credit limit, invoiced this year, invoiced prior year, and so on. The currency you specify is used to record and store transaction history.
Form-specific information Enter the currency you want to see when reviewing credit limits and so on. |
2.7 Setting Up AAIs for Multi-Currency
2.7.1 AAIs for Revaluation
You can automatically create journal entries to revalue your unrealized gains and losses on monetary accounts. To do this, set up the following AAls:
| AAI | Description |
|---|---|
| GVxxx | Designates which account to use for unrealized gains on a monetary account. You can optionally set up a separate item for each currency code (xxx). |
| GWxxx | Designates which account to use for unrealized losses on a monetary account. You can optionally set up a separate item for each currency code (xxx). |
| GR | Designates which offset account to use for unrealized gain/loss. If the offset is the monetary account (for example, 100.1110.FRANCE), which is usually the case, do not set up this AAI. |
2.7.2 AAIs for Balances by Currency
To post multi-currency transactions by currency code, you need to set up the following AAI range:
| AAI | Description |
|---|---|
| PBCxx | Designates which account ranges to use when tracking balances by currency in the Account Balances table (F0902).
The 'xx' defines the beginning and end of a range of accounts. You use pairs of AAI items for each range. For example, 01 defines the beginning of the first range and 02 defines the end of the first range. Note: You CANNOT skip ranges. For example use ranges 01-01, 03-04, 05-06 not 01-02, 05-06. |