Foreign currency journals

Foreign currency journals

Which journals are recorded in foreign currency those journals are called as foreign currency journals.

Steps required enter foreign currency journal

Step1:

Define conversion types:

Navigation:

Setup=>financials =>currencies=>rates =>daily

1.       Enter from currency.

2.       Enter to currency.

3.       Enter date.

4.       Choose conversion type.

5.       Enter conversion rate.

6.       Choose enter date by range to define conversion rates for week month year etc…

7.       Enter from currency.

8.       Enter to currency.

9.       Enter from date.

10.   Enter to date.

11.   Enter conversion type.

12.   Enter conversion rate.

13.   Save it.

Step2:

Enter foreign currency journal

Navigation:

Journals=>enter=>new journal

1.       Enter journal name.

2.       Enter journal description (optional).

3.       Select ledger.

4.       Select period.

5.       Select foreign currency.

6.       Enter lines

7.       Save and post it.

Additional information:

1.       You can choose any enabled currency except STAT.

2.       Enter the To - Currency - the currency to which you want to convert. If you enter the same currency as your from - currency, you will receive an error.

3.       You cannot select the rate type of User. Enter User rate directly on the Enter Journal window when creating a foreign entered journal.

4.       If your conversion rate type is assigned to a definition access set, you must have Modify and View privileges to the conversion rate type to create new rates.

5.       The conversion Date should be within the accounting period you defined for the journal entry but the Date field allows other entries in case you want to use a different period's daily rate. The conversion date is the posting date for the journal entry.

6.       If you don't choose a conversion date, General Ledger uses the default effective date of the journal.

7.       The conversion Type can be the Spot, Corporate, or User type, or any conversion type you defined. If your conversion rate type is assigned to a definition access set, you must have Use privilege to select it

8.       You must enter a conversion Rate if you enter User as the conversion type. If you specify a conversion type other than User,

9.       General Ledger automatically enters the daily conversion rate based on the rates you entered in the Daily Rates window.

10.   Enter your journal lines, using debit and credit amounts in the entered currency. General Ledger automatically converts the entered amounts into your ledger's currency based on the designated conversion rate.

11.   Use the scrolling region to review the results of your currency conversion. You can override the Converted Debit and Converted Credit amounts if you enable the user profile option Journals: Allow Multiple Exchange Rates.

Types of Conversion rates:

Use conversion rate types to automatically assign a rate when you:

1.       convert foreign currency journal amounts to your ledger currency equivalents

2.       run Revaluation

3.       run Translation

You enter daily conversion rates for specific combinations of foreign currency, date, and conversion rate type. When you enter a foreign currency journal, General Ledger automatically displays the predefined exchange rate based on the currency, rate type (unless you are using the User rate type), and conversion date you enter. When you have a User rate type, you enter the rate directly when you enter a foreign currency journal.
Note: If you want to enter different daily rates for the same combination of from-currency, to-currency, and conversion date, you must define separate conversion rate types.
General Ledger provides the following predefined daily conversion rate 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.