Currency Translation account

Related amounts in different currencies are posted to a Currency Translation account. Every transaction in different currencies on the Invoice Accrual account has a one-to-one relationship to a transaction on the Currency Translation account.

For example, if a sales order amount is expressed in USD and the invoice currency is CAD, the sales order amount and the invoice amount are posted to the Currency Translation account. When you approve the invoice, the invoice amount is converted to the order currency with the currency rate of the invoice date and time.

If the calculated order amount differs from the original order amount, these rules apply:

• If the difference is due to currency rate changes between the order date and the invoice date, the difference is posted according to the mapping defined for the Currency Difference integration document type.
• If no currency rate changes occurred, the difference amounts are posted according to the mapping defined for the Purchase Order/Price Variance integration document type, using the Currency Translation account as an interim account.

You can select the Currency Translation accounts and dimensions for the financial company in the Finance Company Parameters (tfgld0503m000) session. For the Currency Translation accounts, do not set the Currency Analysis field to Required, Calculate Currency Diff. in the Chart of Accounts (tfgld0508m000) session.