Currency Conversion

Information contained on the Account/Center Master File (currency code) and on the Currency Master File controls the entry of foreign currency journals and the subsequent conversion of the journals from the foreign currency into the bookkeeping currency.

The currency code on each Account/Center Master record indicates which currencies can be posted to the account.  The currency code on the account cannot be blank.  If the currency code is a valid code for a foreign currency, only transactions in that currency can be posted to the account.  If an account's currency code is 999, transactions in any valid foreign currency or in the bookkeeping currency can be posted to the account.

Associated with each currency code is one conversion rate on the Currency Master File.  This rate is used to convert the transactions entered in a foreign currency into the bookkeeping currency when an override rate is not specified on the journal.  If an override rate is specified on the journal, transactions are converted using the override rate as long as the override exchange rate is within a certain percentage of the conversion rate.  The override exchange rate limit (category 132) on the Reference File contains the percent variance limit used for the standard and override exchange rate limits.  If the percent variance between the standard rate and an entered override exchange rate is exceeded, the override exchange rate is not accepted.

When currency conversion rates are entered on the Currency Master File, you can specify the number of foreign currency units contained in one bookkeeping unit by entering the from operand as /, or you can specify the number of bookkeeping units in one foreign unit by entering the from operand as *.  For example, if U.S. dollars are the bookkeeping currency and British pounds are the foreign currency, the conversion rate could specify the number of pounds (approximately .66 pounds) to the dollar, or the number of dollars (approximately one and a half) to the pound.

Currency conversion processing is performed interactively in the Journal Validation and Intercompany Journal Validation Conversations, and in batch mode in the Standing Journal Selection and Subsystem Journal Validation Programs.  A journal transaction is generated for journals where a rounding difference results for currency conversion.  This transaction is assigned the account and center numbers from the last transaction of the journal.