Multiply or divide rates

A rate is also defined as either a Multiply or Divide rate.

This determines whether the From currency value is multiplied or divided by the rate entered to calculate the To currency.

For example, if a GBP-EUR rate of 1.63 has been defined (from GBP to EUR), and a sterling value is entered on a transaction, the EUR equivalent is calculated as: GBP value x 1.63.

The currency conversion process works in both directions, regardless of which way you define the conversion rate. For example, if a GBP-EUR rate of 1.63 has been defined (from GBP to EUR), and a euro value is entered on a transaction, the GBP equivalent is calculated as: EUR value / 1.63. Reciprocal rates do not need to be defined.

It is important that you define the conversion rate and Multiply/Divide indicator correctly. Therefore, it is advisable to adopt a standard for each business unit, so that all currency rates are defined as either divide or multiply rates. This avoids confusion.

Note: It is particularly important that you do not change the Multiply/Divide indicator from one period to another. This can give unexpected results in some cases.