What are the currency conversion rates?

For each currency or conversion code, you can maintain an unlimited number of currency or conversion rates. A rate is always defined for a combination of From and To currency codes. The From currency is usually the pivot currency.

For example, you might define the following rates where the pivot currency is GBP:

From Currency To Currency Rate
GBP EUR 1.63
GBP JPY 189.22
GBP USD 1.44
Uwaga: The base currency, transaction currency and second base/reporting value currency are always calculated via the pivot currency (see How the Pivot Currency Conversion Works). However, the fourth and fifth currency values can be calculated from any of the other currency values available on a transaction, as defined in the business unit setup. So, if these currencies are being used and are not being calculated from the pivot currency, additional rates will need to be defined From the chosen conversion currency to the valid Fourth and Fifth currencies.

The rates can apply to different time periods (accounting periods or dates), and to selected account ranges. For example, you might define a rate for every accounting period in the year. In addition, you might create different rates for selected balance sheet accounts, for particular periods.

You can maintain two types of currency rate that apply over different periods of time:

  • Period rates - which apply to an accounting period.
  • Daily rates - which apply to specific calendar dates.

Period Rates

Period rates are defined for a from/to currency combination. As the name implies they are typically defined for an accounting period. They can also be defined for an account code range. For example, you can define several GBP to USD currency period rates, relating to various accounting periods and account ranges.

Period rates are defined using Currency Period Rates (CNP).

They are used by Ledger Entry (LEN) and Ledger Import (LIM) to convert currency values as part of the journal input process. They are also always used by Ledger Revaluation (LER) and financial reporting.

For each currency combination (for a range of accounting periods and/or accounts), you can also define an additional five reporting conversion rates. These rates can be accessed by the report writing facilities and are used to convert values for reporting purposes.

Daily Rates

Daily conversion rates are defined for a from/to currency combination, for a specific calendar date, or range of effective dates, rather than an accounting period. Daily rates are particularly useful for highly volatile currencies where the rate fluctuates widely on a daily basis.

Daily rates are defined using Currency Daily Rates (CND), including the range of dates for which each rate is valid.

Currency daily rates are used only if the Use Daily Conversion Rates option is set for the currency in Currency Codes (CNC). The defined rates are used in Ledger Entry (LEN) and Ledger Import (LIM) to apply daily rates to transactions. If a daily rate has not been defined with an effective date range that includes the transaction date, you cannot enter the transaction.

Daily rates are not used for financial reporting or Ledger Revaluation (LER).