Types of currencies

To convert foreign transaction currencies to a company's home currency, and to register amounts in different currencies, you can define these types of currencies:

  • Home currencies
  • Transaction currencies
  • Reference currencies
Home currencies

A company’s home currencies are the base currencies that the company uses to express and register all amounts internally. An LN company can use up to three internal home currencies.

In addition to the home currencies, a company uses external currencies for the transaction with business partners. You must select a company’s home currencies in the Companies (tcemm1170m000) session.

These types of home currencies are available:

  • Local

    The legal currency of the country in which the company is established. Tax reporting must usually be carried out in the local currency. In a logistic company, LN uses the local currency to store the amounts for which you do not specify a specific currency. For example, inventory costs in Warehousing.

  • Reporting 1 and Reporting 2

    In addition to the local currency, a company can use one or two reporting currencies. If the company uses reporting currencies, LN calculates and stores the local currency amounts both in the local currency and in the reporting currencies.

    In sessions that display home currency amounts, you can use the Rotate Currency command from the Tools menu to display the amount in each of the home currencies in turn. If you print a report, you can usually select the home currency to be used for the report.

Reference currency

For all currency systems except the standard currency system, you must select one of the home currencies as the reference currency.

In the standard currency system (default), the reference currency:

  • Can be defined independently of the local and reporting currencies.
  • Can be, but does not have to be, one of the home currencies.
  • Can be used to express amounts that represent balances across multiple companies, for example, lot prices in Warehousing.

For currency systems other than the standard currency system, the reference currency is a company’s base currency for all calculations between currencies.

LN uses the reference currency to convert amounts from the transaction currency to the home currencies in these multicurrency systems:

  • Single multicurrency systems
  • Dependent multicurrency systems

In independent multicurrency systems, LN converts the transaction amounts directly from the transaction currency to the home currencies.

Note

All companies of a multicompany structure must use the same reference currency.

Transaction currencies

In addition to the home currencies, companies use a number of transaction currencies, which are the currencies used for transactions with your business partners.

For example, these amounts are expressed in transaction currencies:

  • Contract amounts
  • Invoice amounts
  • Price lists

You can select a default transaction currency for each business partner.

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