Overview
Transactions that are entered in a foreign currency must be converted to the functional currency in order to be recorded in the set of books. This done at the time the transaction is entered.
If you specify a foreign currency, conversion date, and conversion rate type when entering journals, General Ledger will automatically display the daily rate you defined to convert the foreign currency to your functional currency, for the specified date and rate type, General Ledger calculates functional debit and credit equivalents by multiplying the debits and credits in a foreign currency by the retrieved daily rate.
Use conversion rate types to automatically assign a rate when you convert foreign currency journal amounts to functional currency equivalents. You enter daily conversion rates for specific combinations of foreign currency, date, and conversion rate type.
Conversion Rate Types
General Ledger provides the following predefined daily conversion rates types:
- Spot: An exchange rate which you enter to perform conversion based on the rate on a specific date. It applies to the immediate delivery of a currency.
- Corporate: An exchange rate you define to standardize rates for your company. This rate is generally a standard market rate determined by senior financial management for use throughout the organization.
- User: An exchange rate you specify when you enter a foreign currency journal entry.
Conversion uses Daily Rates, unless User Rate Type is selected. If User Rate type is selected, then the rate must be manually entered at the time of transaction.
Currencies
The Currencies window is used to define non-ISO (International Standards Organization) currencies, and to enable/disable currencies. Oracle Applications has predefined all currencies specified in ISO standard #4217.
To use a currency other than U.S. Dollars (USD), you must enable the currency. U.S. Dollars (USD) is the only currency that is enabled initially. Currency can be disabled or enabled to indicate whether it can be used to enter transactions and record balances or not.
Daily Rates
General Ledger uses daily rates to perform foreign currency journal conversions. You can enter a range of dates for a single exchange rate in the Enter Rates by Date Range window. The date range can span multiple days or periods.
If you want to enter different daily rates for the same combination of from_currency, to_currency, and conversion, you must define separate conversion rate types.
To enter a single rate for a certain date:
Navigation: Setup/Currencies/Rates/Daily
To enter a daily conversion rate:
Navigate to the Daily Rates window.
From: enter the From-Currency. The currency you want to convert from using the rates you enter. You can choose any enabled currency except STAT.
To: General Ledger automatically displays the functional currency for you set of books as the To-Currency, the currency to which you want to convert.
As needed, change the To-Currency. If you enter the same currency as your from currency, you will receive an error.
Conversion Date and Type: Enter Conversion Date and Type. When you use this date and rate type to enter journals, General Ledger automatically displays the rate you define here.
Conversion Rate: Enter the conversion rate you want General Ledger to use to convert your from-currency amounts into your to-currency equivalents.
General Ledger automatically calculates the inverse of the rate and displays it in the adjacent column.
If the profile option Daily Rates Window: Enforce Inverse Relationship During Entry is set to Yes, General Ledger ensures that the rates in both columns always have an inverse relationship. If either rate is changed General Ledger automatically recalculates the other as the inverse of the changed rate. General Ledger will display inverse exchange rates in the Enter Journals and other windows.
If the profile is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
To enter a single rate for a date range:
Responsibility: General Ledger Superuser
Navigation: Setup/Currencies/Rates/Daily - click the Date Range button.
From: Enter the From-Currency. The currency you want to convert from using the rates you enter. You can choose any enabled currency except STAT.
To: General Ledger automatically displays the functional currency for your set of books as the To-Currency. If your functional currency is an EMU currency, the to-currency defaults to EURO. As needed, change the To-Currency. If you enter the same currency as your from-currency, you will receive an error.
From Date and To Date: Enter From Date and To Date to span your desired date range.
Conversion Type: Enter Conversion Type. When you use this rate type to enter for a date within the range to enter journals, General Ledger automatically displays the rate you define here.
Conversion Rate: Enter the conversion rate you want General Ledger to use to convert your from-currency amounts into your to-currency equivalents. General Ledger automatically calculates the inverse of the rate and displays it in the adjacent column.
If the profile option Daily Rates Window: Enforce Inverse Relationship During Entry is set to Yes, General Ledger ensures that the rates in both columns always have an inverse relationship. If either rate is changed General Ledger automatically recalculates the other as the inverse of the changed rate. General Ledger will display inverse exchange rates in the Enter Journals and other windows.
If the profile is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
Average Balance Processing
If you have average balance processing enabled in your set of books, you must define a daily rate on or before the first day of the first year for which you want to translate balances.
Review the conversion rates you have defined for any foreign currency in your set of books. You can request this listing for any accounting period.
This listing prints the rate type for each conversion rate as well as the date on which you defined the rate. General Ledger sorts the listing alphabetically by rate type. For each rate type, General Ledger sorts the conversion rates in ascending order by date entered.
Parameters:
Selected Headings:
If the profile is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
To enter a single rate for a date range:
Responsibility: General Ledger Superuser
Navigation: Setup/Currencies/Rates/Daily - click the Date Range button.
From: Enter the From-Currency. The currency you want to convert from using the rates you enter. You can choose any enabled currency except STAT.
To: General Ledger automatically displays the functional currency for your set of books as the To-Currency. If your functional currency is an EMU currency, the to-currency defaults to EURO. As needed, change the To-Currency. If you enter the same currency as your from-currency, you will receive an error.
From Date and To Date: Enter From Date and To Date to span your desired date range.
Conversion Type: Enter Conversion Type. When you use this rate type to enter for a date within the range to enter journals, General Ledger automatically displays the rate you define here.
Conversion Rate: Enter the conversion rate you want General Ledger to use to convert your from-currency amounts into your to-currency equivalents. General Ledger automatically calculates the inverse of the rate and displays it in the adjacent column.
If the profile option Daily Rates Window: Enforce Inverse Relationship During Entry is set to Yes, General Ledger ensures that the rates in both columns always have an inverse relationship. If either rate is changed General Ledger automatically recalculates the other as the inverse of the changed rate. General Ledger will display inverse exchange rates in the Enter Journals and other windows.
If the profile is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
Average Balance Processing
If you have average balance processing enabled in your set of books, you must define a daily rate on or before the first day of the first year for which you want to translate balances.
Reports
Daily Conversion Rates ListingReview the conversion rates you have defined for any foreign currency in your set of books. You can request this listing for any accounting period.
This listing prints the rate type for each conversion rate as well as the date on which you defined the rate. General Ledger sorts the listing alphabetically by rate type. For each rate type, General Ledger sorts the conversion rates in ascending order by date entered.
Parameters:
- Period: Choose any accounting period in your calendar.
- Currency: Choose any foreign currency you have defined or enabled.
Selected Headings:
- Rate Type: one of the following rate types for each conversion rate in your listing: Corporate, Spot, User or a unique rate type you defined.
- Date: date for which you defined your conversion rate.
- <Foreign Currency> to <Functional Currency>: daily conversion rates from the foreign currency you specified to the functional currency for your set of books
- <Functional Currency> to <Foreign Currency>: daily conversion rates from the functional currency for your set of books to the foreign currency you specified.
Profile Options
Daily Rates Window: Enforce Inverse Relationship During Entry
Use this profile option to specify whether to enforce the automatic calculation of inverse exchange rates in the Daily Rates window. When the profile option is set to Yes and you enter a daily rate to convert currency A to currency B, General Ledger automatically calculates the inverse rate (currency B to A) and enters it in the adjacent column. If either rate is changed General Ledger automatically recalculates the other.
The default value for this profile option is No.
You can only view this profile option at the user level. Your System Administrator must set this profile option at the site, application or responsibility level.
Journals: Allow Multiple Exchange Rates
Specify whether you want to allow multiple conversion rates within a journal entry. The following rules are available to you:
Yes: You can override the converted amount when you enter journals.
No: You cannot override the converted amount when you enter journals.
NOTE: This profile option does not allow you to create an entry in one currency and an offset in another currency. Entry and offset must be in the same currency.
The default value for this profile option is No.
You can set this profile option at the user level. Or, Your System Administrator can set this profile option at the site, application or responsibility or user level.
Source: Oracle
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