Understanding Foreign Currency Journal Entries

A foreign currency journal entry is a transaction that is in a currency that is different from the base currency associated with the company. When you enter a foreign currency journal entry, the two currency code fields that appear on the Journal Entry form work as follows:

• Base Currency.

  The system assigns the currency of the company associated with the account number on the first line of a journal entry as the base (domestic) currency of the transaction and the document company.

• Currency.

  Unless you enter a specific currency code in the Currency field, the system uses the account number on the first line of the journal entry determines the transaction currency:

  • If the account is a non-monetary account, the transaction currency is the currency of the company associated with the account.

  • If the account is a monetary account, the transaction currency is the currency assigned to the account.

When these two currency fields contain different currency codes, the journal entry is a foreign currency journal entry.

Note:

For multiple currencies prior to release 8.11, the system created domestic amounts and foreign amounts in the F0911 and F0902 tables. Domestic amounts were stored in the Amount field of the AA (actual amounts) ledger record whereas foreign amounts were stored in the Amount field of        the CA (foreign currency) ledger record for both tables.

As of release 8.11, the system stores both the domestic and foreign amounts on a single record in the F0911 table. The foreign amounts are stored in the Foreign Amount field of the F0911 record and the Amounts field of the CA (foreign currency) ledger. These two fields contain the same amounts.