Examples of Using Conversion Rate Types in a Journal

The following conversion rate types are predefined: Spot, Corporate, User, Fixed.

Scenario

You are the general ledger accountant for Vision US Inc. You are entering a journal entry to capture three transactions that were transacted in three different foreign currencies.

• Canadian Dollar CAD: A stable currency

• Mexican Peso MXP: A fluctuating currency

• Hong Kong Dollar HKD: An infrequently used currency

You enter two journal lines with accounts and amounts for each foreign currency transaction. Based on your company procedures, you select the rate type to populate the rate for Corporate and Spot rate types from your daily rates table. You manually enter the current rate for the User rate type.

The following table lists the currency, the rate type that you select, and the reasons for the rate type selection.

Selected Currency	Selected Rate Type	Reason
CAD	Corporate	Entered a periodic type of transaction. Your company has established a daily rate to use for the entire month across divisions for all transactions in Canadian dollars, a stable currency that fluctuates only slightly over the month.
MXP	Spot	Entered a periodic type of transaction. Your company enters daily rates each day for the Mexican peso because the currency is unstable and fluctuates.
HKD	User	Entered a one time transaction. Your company doesn't maintain daily rates for Hong Kong dollars.

Your company doesn't currently use the Fixed rate type. From January 1, 1999, the conversion rate of the French franc FRF against the Euro EUR was a fixed rate of 1 EUR to 6.55957 FRF. Your French operations were started in 2007, so you maintain all your French business records in the Euro.