Calculating Currency Rates
This section provide an overview and discusses calculate currency rates, multicurrency processing and translation options.
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Page Name |
Definition Name |
Usage |
|---|---|---|
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RUN_EO9030 |
Run a process to create a report that calculates cross-reciprocal rates. |
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CURRENCY_EXCHNG_PN |
Calculate currency exchange between currencies. This tool enables you to select a rate type other than the base currency, but not to override the exchange rate. |
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CURR_REQUEST |
Run the FSPCCURR COBOL process to create a calculations log during processing. |
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CURR_STEP_GN_LS |
Use to specify the specific accounts where you record translation gain or loss. |
PeopleSoft software calculates currency rates for cross-rates, triangulated rates, and reciprocal rates.
PeopleSoft applications utilize two tools for currency calculations:
The Currency Exchange Calculator quickly performs ad hoc currency conversion using the exchange rates that are stored on the market rates table.
The Cross/Reciprocal Rate Calculator calculates exchange rates and updates the market rates table. It performs three functions by generating:
Term |
Definition |
|---|---|
Cross-rates for non-triangulated currency pairs. |
For example, an organization subscribes to a rate service that provides all rates respective to USD. Starting with a USD to Canadian dollar rate and a USD to Mexican peso rate, the system can calculate a new Canadian dollar to Mexican peso cross-rate. |
Triangulated rates for triangulated currency pairs. |
For example, the EUR to an EPC (euro participating currency) fixed rate has been established on the market rate table and a new EUR to USD rate has just been entered. Using this information, the process can create a new USD to EPC triangulated rate. The difference between triangulated rates and cross-rates affects how the data is stored in the database. When calculating a cross-rate, you actually create a new rate. When calculating a triangulated rate, the individual components of the source rates are stored on the target. |
Reciprocal rates for those currency pairs that are not automatically reciprocated. |
For example, using a USD to CAD rate as the source, the process calculates the CAD to USD reciprocal. If quote methods are in place, the visual rate remains the same and there is a difference in how the data is stored in the database (RATE_MULT and RATE_DIV are inverse). If quote methods are not used, the process actually calculates an inverse rate, meaning that the visual rates differ. |
Note: To calculate currency rates, use the Translation Steps component (TRANS_STEP).
Use the Cross/Reciprocal Rate Calc − Parameters page (RUN_EO9030) to run a process to create a report that calculates cross-reciprocal rates.
Navigation:
Field or Control |
Description |
|---|---|
Language |
Select the language for translation. |
Market Rate Index |
Select a market rate index. Applications other than PeopleSoft Treasury should use the default index that you select for the exchange rate. |
Term |
This value defaults from the value entered on the Market Rate Definition page. |
From Common Currency |
Select a currency code to calculate a reciprocal rate. |
Exchange Rate Type |
Select the Exchange Rate Type to use for this calculation. |
As of Date |
Determines the effective date of newly created exchange rates (the output of the process) and rates that are used as the basis for calculations (the input to the process). The report uses the most current currency quotation method for the currency pair as input for the process. If the as of date is the current effective rate as of the specified date, it can affect triangulation. A USD to an EPC (euro participating currency) triangulated rate effective April 1, 2004 might be comprised of the EUR to USD rate also effective April 1, 2004 and the fixed EUR to an EPC rate effective on the date the newly participating EPC officially becomes a euro participating currency. |
Generate Report |
If this check box is selected, the system generates a report that displays exchange rates and reciprocal and cross-rate calculations. |
Override Existing Rates |
If you click this check box, the calculated rate overrides rates for the exchange rate type, regardless of the as of date. |
Generating Reciprocal Rates
You can select the Generate Reciprocal Rate check box by itself or in combination with the Rate Triangulate and Generate Cross Rate check boxes. When the generate reciprocal rate option is selected, the system automatically calculates reciprocal rates for currency pairs that do not have the auto reciprocate option on the currency method enabled.
PeopleSoft software does not directly manipulate the exchange rates. The system uses numerator and denominator values such that:
(From currency / RATE_DIV) × RATE_MULT = To currency
Suppose you want a reciprocal rate between United States dollars and Swiss francs and assume a 2 to 1 ratio. If the exchange rate for USD to CHF is quoted directly (either using a direct quote method that you selected or using the system default), this rate is stored as RATE_MULT = 2 and RATE_DIV = 1. The rate is represented as 1 USD = 2 CHF, with a visual rate of 2.
The CHF to USD rate, in turn, must be indirect. The reciprocal is a simple exchange, storing the rate as RATE_MULT = 1 and RATE_DIV = 2. The visual rate remains 2.
If quote methods are not being used, the CHF to USD rate must be quoted directly (the default), so the reciprocal rate is actually a calculated inverse. This rate is stored as RATE_MULT = 0.5 and RATE_DIV = 1, with a visual rate of 0.5.
In this example between USD and CHF, using a quote method and using a calculated inverse produced the same end result, 1/2 equals 0.5. But in actual practice, the manipulation of exchange rates is a major task and is one of the reasons for establishing the quote method.
Generating Cross Rates
When you select the Generate Cross Rates check box, the system automatically generate cross rates. For example, to generate cross-currency rates for USD, CAD, and MXP, you enter USD to CAD = 1.473 and USD to MXP = 9.8793. The system automatically generates CAD to MXP = 9.8793/1.473 = 6.7069246.
If you choose to generate cross rates, you must select a From currency and a To currency. You can enter a wild card of % in either field or both fields to indicate from all or to all currencies.
Generating Triangulation Rates
When you select the Rate Triangulate check box, the system converts two currencies through a third currency. If you select rate triangulation, you must select a From currency and a To currency. You can enter a wild card of % in either field or both fields to indicate from all or to all currencies.
Use the Currency Exchange Calculator page (CURRENCY_EXCHNG_PN) to calculate currency exchange between currencies.
This tool enables you to select a rate type other than the base currency, but not to override the exchange rate.
Navigation:
Field or Control |
Description |
|---|---|
From Amount |
The currency exchange is based on the from amount that you enter and the current exchange rate set up on the Market Rates page. |
From Currency Code |
Select the currency code from which to calculate the exchange amount. |
To Currency Code |
Select the currency code to which to calculate the exchange amount. |
Exchange Rate Type |
Select the type of exchange rate to use for this calculation. |
Converted Amount |
The system automatically calculates the amount in this field when you save the page. |
Use the Multi-Currency Processing - Request page (CURR_REQUEST) to run the FSPCCURR COBOL process to create a calculations log during processing.
Navigation:
Field or Control |
Description |
|---|---|
Group |
Identify the multicurrency group to be processed with this request. |
Calc Log (calculation log) |
Click this check box if you want the system to create a log of all the calculations performed during processing. |
Request Date Option |
If you select the As of Date option, specify a date in the As of Date field. You can define steps using relative TimeSpans, such as BAL (current balance). A relative TimeSpan causes the process that you are running to retrieve ledger amounts that are relative to the as of date you specify on this page. The steps that are processed by this multicurrency processing request must be effective on or before the as of date. If you select the Business Unit Process Date option, the process uses the date option on the business unit general ledger definition, retrieves the date, and uses it for the as of date. |
As of Date |
The as of date is used to retrieve:
If a step definition indicates that a journal should be created, then it uses the as of date as the journal date. |
Note: The journals created by multicurrency processing are not intended to be viewed using the journal entry pages. Run the journal edit process against these journals before you attempt to view them.
Use the Gain and Loss ChartFields page (CURR_STEP_GN_LS) to use to specify the specific accounts where you record translation gain or loss.
Navigation:
Field or Control |
Description |
|---|---|
Check Balance of Step |
Select this box to allow translation of ledgers that do not balance or that contain only a portion of the chart of accounts. If this check box is deselected, the translation process skips the edit for a balanced set of accounts. The From ledger can be a balanced or unbalanced ledger, but you must define the target ledger as an unbalanced ledger for that business unit. |
Generate Adjustment |
Select this check box if the target business unit ledger is a balanced ledger. If you leave the check box deselected, translation processing does not generate the gain and loss entry and the gain and loss ChartFields on the page do not display values. |