How the pivot currency conversion works
The use of the pivot currency to convert currency amounts is best illustrated using examples.
Remember that all exchange rates must be defined from the pivot currency to the other currencies.
Example 1: Transaction Currency as Pivot
The following currencies and rates have been defined and the transaction currency is the pivot currency.
| Currency | Example 1 Rate from EUR to ... | Example 2 Rate from JPY to ... |
| GBP (Base currency) | 1.5 | 3.0 |
| USD (Second base) | 2.0 | 2.0 |
Ledger Entry Example 1: transaction amount entered in euros (EUR)
Transaction amount is entered manually on the transaction as EUR 100.00.
The base amount(GBP) is calculated from the transaction amount using the rate from EUR (pivot) to base (GBP) i.e. 150.00.
The second base is calculated from transaction amount using the rate from EUR to USD i.e. $200 (100 x 2.0).
This is illustrated below:
Ledger Entry Example 2: base amount entered and transaction currency is in Japanese Yen (JPY)
The transaction amount is calculated from the base amount using JPY (pivot) to GBP rate i.e. 40 (120/3).
The base amount (GBP) is entered manually as 120.00 GBP.
The second base (USD) is calculated from the transaction amount using JPY to USD rate i.e. $80 (40 x 2).
This is illustrated below:
