Understanding the No Inverse Method

The no inverse method is a calculation method that uses the same exchange rate for the multiplier and divisor rates. The no inverse method reduces the rounding differences that can occur when you work with large amounts using the inverse method and reciprocal rate. Any rounding differences that might occur with the no inverse method are usually immaterial.

To convert amounts from one currency to another using the no inverse method, you set up from and to currency relationships and a no inverse rate for each relationship. You can specify the divisor method when calculating to a currency and the multiplier conversion method when converting from a currency, or vice versa. When you set up exchange rates for the no inverse method, you enter one rate and specify whether to use the multiplier or divisor conversion method when converting amounts for a particular currency relationship. You can set up exchange rates for the no inverse method using the multiplier conversion method to calculate from a currency and the divisor conversion method to calculate to a currency, or vice versa.

When you set up an exchange rate for the no inverse method, the system automatically creates a corresponding record in the opposite direction. For example, if you set up an exchange rate record from CAD to JPY for the no inverse method and specify conversion method Z (divisor), the system automatically creates an exchange rate record from JPY to CAD with conversion method Y (multiplier). The two rates on these exchange rate records are the same—one is the divisor rate and the other is the multiplier rate. The opposite rate on each record is blank because, with no inverse, that rate has no purpose.

You can use the triangulation calculation method in combination with the no inverse method.