Currencies are commonly used as a representation of payment in trading or banking transactions, especially in the global business market. For every business transaction where payment is involved, currencies play the important role in determining the overall revenue and loss of a company.
Apart from the system-defined currencies, you can create or maintain other currencies at this screen. Each currency contains its own data and attributes which can be defined under different tabs: General, EMU, General ledger, and Extra. When defining a new currency, you should at least enter the data under the General and Extra tabs. The General tab is where most of the static information of a currency is recorded and maintained. Once saved, you can view or maintain the defined currency.
The information in this document is applicable to product update 411 and higher. If you have versions lower than this, certain features explained here will not be applicable.
Keep in mind: All fields with the "!" icon are mandatory.
Type a three-character code for the currency. Once the code is saved, it cannot be edited. This is mandatory.
Type a description for the currency. This is mandatory.
Click this to type the description for the currency in other foreign language(s). The foreign languages available are based on the languages defined under the Description in list boxes section in General settings. For more information, see General settings.
Type an abbreviation for the currency, which may contain up to five alphanumeric characters.
Select this check box to activate the currency to be used in the system. Once an activated currency is used in a transaction within the system, you cannot deactivate the currency.
There are four tabs available in this screen:
Type or select a SWIFT currency to indicate that the currency is part of the SWIFT group that supports electronic banking. This is mandatory.
Type a character that represents the currency.
Select this check box if you want to modify the exchange rate when making a journal entry for the currency. To do so, you must also select the Variable exchange rate check box at the journal maintenance screen of the journal in which the currency is used in (go to System ? Finance ? Journals, select the relevant journal and click Open). For more information, see Creating and maintaining journals.
Type the conversion factor which you want to use to convert another currency to your standard currency.
This is the precision for exchange rates. This precision reflects the number of decimal places for the exchange rate of the currency. For EMU currencies, the rule sets that exchange rates must show six figures.
Type the precision for amounts entered in the system for this currency. For most currencies, this is set to two and the amount shown will be in two decimals.
Type the precision for prices entered in the system for this currency. Prices normally are not rounded off, unlike amount which is often rounded to two decimals. Hence, working with three or four precision for prices is common for certain goods with prices in high value currency like the British Pound (GBP).
This section explains how the conversion factor is applied to convert a foreign currency into the standard currency EUR.
Example given is 1 EUR = 1.000000 EUR. Consider that we want to convert USD 50 to EUR and assume the exchange rate for EUR-USD is: 1 EUR = 1.230 USD. To convert USD 50 to EUR, you will have to divide 50 by 1.23 which reflects the conversion factor of one or 1.23 USD equals to 1 unit of EUR. As such, USD 50 will be equal to EUR 40.650406 after we divide 50 by 1.23.
Select this check box to define the currency as a European Economic and Monetary Union (EMU) currency.
Type or select a date to indicate the date when the currency joins the EMU group.
Note: This is enabled only if you have selected the EMU currency check box.
General ledger tab
Note: When you are creating an active currency or changing an inactive currency to active, you are required to define a general ledger account for all the fields displayed under this tab as described in the following.
Type or select a general ledger account to be used for recording the loss from purchases due to changes in the exchange rate.
Type or select a general ledger account to be used for recording the gain from purchases due to changes in the exchange rate.
Type or select a general ledger account to be used for recording the loss from sales due to changes in the exchange rate.
Type or select a general ledger account to be used for recording the gain from sales due to changes in the exchange rate.
Type or select a general ledger account to be used for recording the loss if there is an unfavorable revaluation made to the standard exchange value.
Type or select a general ledger account to be used for recording the gain if there is a favorable revaluation made to the standard exchange value.
Type any additional information for the currency at the defined free fields. You can customize the label of the free fields under the Currencies table at System ➔ General ➔ Free fields. For more information, see Maintaining free fields.
Click this to save the currency. You may be required to restart the system for the changes to take effect.
Click this to create another currency.
Click this to exit.