Ignore Invoice Exchange Rate Variances for Inventory, Expense, and Work Order Destination Purchases
Exchange rate variance (ERV) is a change in the Payables liability in the ledger currency due to the exchange rate fluctuations when the invoice is in a currency different from the ledger currency.
You can also exclude the ERV recorded on payables invoices in Receipt Accounting and Cost Accounting transactions. This prevents the impact of ERV on inventory valuation when receiving purchase orders with inventory, expense, and work order destinations. For all cost methods, you can exclude ERV for item costs and inventory valuation. Some of the benefits of excluding ERV are:
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Adhere to regulatory requirements for inventory valuation by classifying ERV as a period expense that's recorded in the period it's incurred.
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Ensure accurate unit item costs and inventory valuation.
You must enable the profile option Ignore Invoice Exchange Rate Variances for Inventory,
Expense, and Work Order Destination Purchases
(ORA_CMR_IGNORE_AP_ERV_TERV) to exclude ERV.
If enabled, any exchange rate variance distributions lines will be ignored from receipt and cost processing and where applicable, such lines won't be interfaced to Projects.