Currency systems

The company’s currency system determines:

  • The number of home currencies that the company uses.
  • The method used to convert amounts in transaction currencies into amounts in the home currencies.

If the companies form a logistic company structure, special rules apply to the currencies that each company can use, depending on the currency system. LN supports these currency systems:

  • Standard (recommended)
    A currency system in which foreign currency transactions are translated straight from the transaction currency to the local currency, without triangulation through the reference currency. You can define the rules for translation to the other reporting currencies either directly from the transaction currency, or from the local currency. The standard currency system replaces the other currency systems previously used in LN.
  • Single
    In all financial companies, one and the same currency is used. This is the local home currency, which is also the reference currency.
  • Dependent
    A currency system in which you can use multiple home currencies within the same logistic company. For most entities, the financial company determines the local currency that is used. All transactions are registered in all home currencies. Currency rates are defined between the external currencies and the reference currency, and between the reference currency and the other home currencies. Transaction amounts are first converted into an amount in the reference currency and then the amount in the reference currency is converted into amounts in the other home currencies.
  • Independent
    A currency system in which all financial companies and logistic companies that are related to each other in the enterprise structure model use the same two or three home currencies. All transactions are registered in all home currencies. Currency rates are defined between the transaction currencies and all home currencies. Transaction amounts are translated directly from the transaction currency into the home currencies.

Except for the case when a home currency is also used as transaction currency, no currency rates are defined between the home currencies of an independent currency system. Therefore, the home currencies are independent of each other.

The independent currency system is primarily intended for use in high-inflation countries. Reporting to the local authorities can be done in the national currency, which may be unstable. At the same time, company accounting can be done using a more stable currency such as dollars.

"Currency Initialization Scenarios," describes the CRI scenarios that support the conversion from each type of currency system into one of the other currency systems.