Home Currency
This is the main currency the system runs and reports in. Normally AUD in Australia, NZD in New Zealand, etc. The general ledger always operates in the Home Currency. An option to report in another currency simply converts the GL account balances to the other currency at a point in time (as at the rate date), and displays the report on screen or as a printed report/document.
Source Currency
This is the currency shown on the source document, eg. a vendor’s invoice in Japanese Yen (foreign exchange on PO) or a sales invoice from Jim2 in USD (foreign exchange on sell).
Rate Date
The date the foreign currency transaction occurred.
Rate
The factor which, when computed with the rate operator and the source currency, will give the equivalent home currency amount. Currency rates are recorded in the Currency Rate table.
Rate Operator
Multiply or divide as the case may be from currency to currency, ie. AUD1 x 1.0420 = NZ$1.042.
Rate Types
For example, Daily, Monthly, Weekly. The user enters a rate, normally from a predefined list depending on what function they are performing in the system. Some foreign exchange on PO examples are:
▪Entering a PO – use a daily or monthly rate.
▪Paying a vendor invoice – use the actual rate the bank provides for the foreign exchange transaction.
▪Revaluing foreign currency creditors at month end – monthly rate.
▪Revaluing foreign currency creditors at year end – yearly rate.
▪Simply recording the rate used at close of year – yearly rate.
Rate Source
The place a user would go to find the prevailing rate on the rate date, eg. the Australian Taxation Office, the Reserve Bank of Australia or The Financial Review.
The Spread
Is the maximum amount that you can override the rate entered without being warned – it is a check to guard against an error in the rate entry.
Currency Codes
The setup code for the various defined currencies the system will allow. For example:
AUD |
Australian Dollars |
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USD |
United States Dollars |
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NZD |
New Zealand Dollars |
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EUR |
European Euro |
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GBP |
UK Pound Sterling |
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F |
French Franc |
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JPY |
Japanese Yen |
Currency Table
This is the table that defines the interaction between two currencies. For example, to convert USD100 to an AUD equivalent, divide (rate operator) the number of USD by the rate on the rate date.
Rate Matching
If an exact method is chosen, the user is forced to enter a rate for each rate date/rate type, otherwise the user can enter a rate whenever, and the system will choose the latest earlier rate (lower) or earliest later rate (higher) it finds – automatically.
Further information: