Understanding How Domestic Amounts Are Calculated on Foreign Invoices Without Taxes
When you enter a foreign invoice without taxes, the system simply multiplies the foreign gross amount by the exchange rate to derive the domestic gross amount. If the invoice has a payment term that splits the amount entered into multiple pay items, the system performs soft rounding on both the foreign and domestic gross amounts. It does this so that the sum of the foreign pay items equals the original foreign amount entered and the sum of the domestic pay items equals the original foreign amount entered multiplied by the exchange rate.
These examples illustrate the differences between a foreign invoice that the system splits into multiple pay items and one that is entered with multiple pay items. For these examples, this information applies:
An invoice is entered in CAD for a U.S. company.
The foreign currency amount entered is 100.00 CAD.
The system uses the multiplier conversion method to calculate amounts.
The exchange rate is 1.4 (CAD to USD).
The domestic amount calculated by the system equals 140.00 (100.00 Ã 1.4).