To use the rate determiner

The rate determiner is used to determine whether you want to use a variable currency rate (rate determiner = Document Date or Expected Cash Date) for all invoice transactions, or a fixed currency rate (rate determiner = Fixed or Manually Entered). The currency rate can be determined in different ways to make sure that the method is in line with the way you run your business.

For the Document Date rate determiner, the currency rate is retrieved with the invoice date and the business partner exchange rate type, from the Currency Rates (tcmcs0108m000) session. For the Expected Cash Date, LN takes the Payment Days into account to calculate the invoice date to retrieve a rate from the Currency Rates (tcmcs0108m000) session. As a result, the invoice amounts can have different currency rates during the life cycle of the project.

If you want to use the same currency rate for a project, you can use the Fixed or Manually Entered rate determiner. For example, if you work with long-term contracts, you want to be sure that the unit cost currency in which your project is paid by your American business partner, is virtually inflation-proof. In case of a Fixed rate determiner, you might use currency hedging and buy dollars to counterbalance inflation risks. You invoice for a fixed business partner currency rate, which you enter in the Rate field in the Contracts (tpctm1100m000) session.

If you use the Manually Entered rate determiner, you can also enter the currency rate. This entered currency rate remains fixed for the life cycle of the project, as with Fixed. However, with Manually Entered the currency differences (currency write offs) are used in the interim result. Note that the Rate field can only be entered in these two cases and only in the Contracts (tpctm1100m000) session or the Contract Lines (tpctm1110m000) session. As a result, the invoice amounts will have the same currency rate during the project. The Currency Rates (tcmcs0108m000) session is not used.

In an independent currency system situation, the following rate determiners also apply:

• Fixed Local: The rate is only fixed for the local currency.
• Fixed Hard: The rate is fixed for the reporting currencies.
• Fixed Local and Hard: The rate is fixed for all three home currencies.

Business partner currency

By default, this is the currency of the invoice-to business partner. In Project, the business partner currency is used for all invoice transactions and for the contract amount. In cost plus transactions, the invoice currency can be changed to a different currency than the business partner currency. For these transactions a separate invoice is printed.

Exchange rate type

The exchange-rate type in the Contracts (tpctm1100m000) session is used to calculate the currency rate of the business partner currency and the contract amounts. If the company uses a dependent multicurrency system, the ERT is valid between the business partner currency and the reference currency. In an independent system, the ERT determines the currency rate between the business partner currency and the three home currencies.

In the Project Parameters (tppdm0100s000) session, two exchange rate type settings are available:

• Default Exchange Rate Type for Costs

  This setting is used to calculate:

  • Estimated amounts in the home currencies in Estimating.
  • Standard cost object amounts in the home currency.
  • Amounts that are not directly project related and have no business partner.

• Default Exchange Rate Type for Revenues

  This setting is used for invoice exceptions. The currency for sales amounts is normally defaulted from the business partner. If you do not use a business partner (for estimating or manually entered revenues in Revenue Entry (tpppc3501m000), there is no exchange rate type. The Default Exchange Rate Type for Revenues determines the currency rate from the Currency Rates (tcmcs0108m000) session.