Rate Is Divisor

Select this check box to specify that currency exchange calculations will use the exchange rate as a divisor of the domestic currency rather than as a multiple.

This setting is useful if your domestic currency has a much smaller value in comparison with the foreign currency to which you are converting (such as 2100 domestic to 1 unit of foreign). In this situation, the normal system calculation does not support enough decimal places to perform the conversion accurately. To ensure an accurate calculation, use the Rate is Divisor option.

When the Rate is Divisor check box is selected, these currency calculations are used:

To convert a foreign amount to domestic: Domestic amt = Foreign amt * exchange rate
To convert a domestic amount to foreign: Foreign amt = Domestic amt / exchange rate

Note: When the Rate is Divisor check box is selected, you must enter the exchange rate in the Exchange Rate fields as the number of units of the domestic currency to one unit of foreign (rather than the reverse, as is the case when the Rate is Divisor is cleared).

When the Rate is Divisor check box is cleared, these currency calculations are used:

To convert a foreign amount to domestic: Domestic amt = Foreign amt / exchange rate
To convert a domestic amount to foreign: Foreign amt = Domestic amt * exchange rate

See this Calculation Example.

When one of the currencies involved in a transaction is Part of Euro, and the other currency uses the Rate is Divisor option, the calculations are different.

See this Euro Triangulation Example.