Conversion rules for rate and rate factor

Rate/Rate factor conversion rule

The currency exchange rates are usually stored in the database with the amount, as well as the rate effective date. If the currency and the amount change, the correct new rate, rate factor, and effective date must also be stored. The setting of the Express in Base Currency check box which is either selected or cleared, must be copied.

The currency-rate registration for single and dependent currency systems differs from independent currency systems. Therefore, the rate/rate-factor conversion is also different. See "Currency-rate registration" under "Currency Systems and Company Structures."

During external conversion, the home currencies do not change and a simpler method can be used to convert the currency rates and rate factors. Therefore, two rate/rate-factor rules exist:

  • Rate/rate factor, used during internal conversion
  • Rate/rate factor (external), used during external conversion
Rate factors and rate effective-date conversion

In all cases, these changes are made during the conversion:

  • The rate factors of the converted amounts are set to the appropriate rate factors defined for the home currencies in the CI Rates (tccri7100m000) session.
  • The new currency rate’s effective date stored with the converted amount is set to the date when the currency initialization was carried out.
Internal rate/rate-factor conversion
Important!

Home-currency amounts must be converted before the rate/rate-factor conversion-rule is used.

To avoid revaluation of the home-currency amounts, the rates stored with the converted amounts in the new home currencies are calculated from the new home-currency amounts and the corresponding amounts in the reference currency or the transaction currency.

Note

If the rate cannot be calculated because the amount is not available in the home currency but only in the transaction currency, the rate entered in the CI Rates (tccri7100m000) session is stored for the amount. For example, the amounts of invoices that are not yet composed are not available in the home currency.

One amount is divided by the other depending on the setting of the Express in Base Currency check box in the CI Rates (tccri7100m000) session.

Depending on the currency system after the currency initialization, different calculations are carried out.

  • Conversion to single or dependent multicurrency system
    • If the reference currency changes, all rates are calculated. First, the rate between the transaction amount and the new reference currency is calculated. Next, for a dependent multicurrency system the rates between the amount in the reference currency and the other (new) home currencies are calculated, with the exception of rates between an EMU currency and the euro: in that case, the fixed CI conversion rates are stored.
    • If the reference currency does not change for a dependent multicurrency system, the rates between the amount in the reference currency and the other new home currencies are calculated.
  • Conversion to independent multicurrency system
    The rates between the transaction currency and the new home currencies defined in the CI Rates (tccri7100m000) session are taken.
  • Conversion to standard multicurrency system

    First, the rate between the transaction amount and the new local home amount is calculated. Next, depending on the individual translation method settings defined in the CI cluster, either the rates between the transaction currency and the new reporting home currency, or the rate between the new local home currency and the new reporting currency defined in the CI Rates (tccri7100m000) session, are taken.

    When Operation Management tables, Integration Transactions (tfgld482), or FAM tables in Financials are converted, reporting amounts and rates are directly translated from the transaction currency.

External rate/rate-factor conversion
Important!

Before the rate/rate factor (external) conversion rule is used, transaction-currency amounts must first be converted to euro.

The currency rates between EMU currencies and the euro must be based on the euro. It is not permitted to use inverted rates. Therefore, the new calculated currency rates are based on the transaction currency instead of the home currency.

  • Conversion to single or dependent multicurrency system
    The currency rate between the transaction amount in the new transaction currency (euro) and the reference currency is calculated.
  • Conversion to independent multicurrency system
    The currency rate between the transaction amount in the new transaction currency (euro) and each of the home currencies is calculated.
  • Conversion to standard multicurrency system
    The currency rate between the transaction amount in the new transaction currency (euro) and each of both the local, and those reporting home currencies with the "From Transaction Currency" translation method, is calculated.

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