Understanding Multicurrency Conversions

You can define multiple currencies and UOMs for a pricing location. When multicurrencies are involved, the system creates the requisition and purchase order provided that there is a currency and UOM match. If there is no match, the system uses an additional hierarchical path to determine the price and currency to use when creating the requisition and purchase order. When required, the system also performs multicurrency conversions.

This diagram illustrates the multicurrency conversion hierarchy:

Requisitions are created in the PeopleSoft Purchasing business unit currency when the Allow Multicurrency Reqs (allow multicurrency requisitions) check box is clear on the Purchasing Definition - Business Unit Options page. If the check box is selected, the requisition is created in the requester's currency.

When the system determines the pricing location and the pricing location is defined in the Item Supplier setup, the following text describes the steps that the system uses to determine what price to use based on the requisition (transaction) currency.

Use these steps to determine the requisition multicurrency price:

1. If the pricing location has a price defined in the requisition currency and UOM, this is the price that is used.

2. If there is no match in step 1, the system looks at the currency defined for the supplier order location.

3. If the supplier location currency (price supplier location) is not specified, the system moves on to step 4.

   If the supplier location currency (price supplier currency) is specified, the system accesses the item-supplier pricing location to obtain the price for the supplier location currency (price supplier currency) and transaction UOM. If there is a match, the system takes that price and converts it to the transaction currency.

4. If there is no match in Step 3, the system uses the transaction currency and supplier default UOM to find a match in the pricing location.

   If it finds a match, this price is used on the requisition. When there is no match and if the supplier location currency is not defined, the system skips step 5 and moves on to step 6.

5. If there is no match in step 4, the system uses the price supplier currency derived in step 2 and the default UOM when checking the pricing location.

   If there is a match, it converts it to the transaction currency.

6. If there is no match in step 5, the system uses the standard price.

   If the currency is different, it converts that price to the transaction currency.

The requisition base price is derived from the transaction price. If the transaction price is in a different currency, the system converts it into the base price currency.

If the Allow Multicurrency POs check box is selected on the Purchasing Definition - Business Unit Options page, purchase orders are always built in the supplier order location currency (price supplier currency). If the supplier location currency is not defined, or if the Allow Multicurrency POs check box is clear, the purchase order is built in the currency for the PeopleSoft Purchasing business unit.

When the Override Suggested supplier check box is clear, the purchase order is built from the requisition, and if currencies are different, the system converts the requisition transaction price or currency to the purchase order currency. If the Override Suggested Supplier check box is selected, the system follows the same Supplier location hierarchies described previously.

If the purchase order is built from a requisition and the Define PO option was selected during requisition selection, the purchase order is built in the supplier currency, or the modified currency, if it was modified during Define PO.