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Currency Conversion Document Version: 1.0 Date: Nov 2000 Author: Debra Vandegrift

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Table of Contents Overview………………………………………………………………. 2 Conversion Steps……………………………………………………….3 Define Conversion Rates……………………………………………….3 Define Currencies………………………………………………………5 Enter Daily Rates………………………………………………………9 Automatically Loading Daily Rates…………………………………..12 GL_DAILY_RATES_INTERFACE Table…………………………..13 Entering Foreign Currency Journals…………………………………17 Reports………………………………………………………………….20 Profile Options………………………………………………………….21 Patches…………………………………………………………………..22

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Conversion: 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. Example: Your functional currency in your set of books is USD. You have a manual journal entry recording a transaction that is in Canadian dollars. On the Enter Journals form, you will enter this journal with a currency of CDN. You will be prompted to enter and exchange rate. This is the conversion rate.

Responsibility: General Ledger Superuser Navigation: Journals/Enter/New Journal Form Name: GLXJEENT 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. In 11.0 and 11.5, Daily Rates may be manually or automatically entered.

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Conversion Steps: 1. Define Conversion Rate Types. 2. Define and enable Currencies. 3. Enter Daily Rates. 4. Enter Foreign Currency Journals (Automatic Conversion). Step 1. Define Conversion Rate Types 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. When you enter a foreign currency journal, General Ledger automatically displays the predefined exchanged 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. 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. 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. 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. • EMU Fixed: An exchange rate General Ledger provides automatically when you

enter journals (after EMU effective starting date) using a foreign currency that has a fixed relationship with the EURO.

You can use these predefined rate types to enter exchange rates, or you can define additional conversion rate types. After defining a conversion rate type, enter daily rates using that rate type.

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To define a new conversion rate type:

Responsibility: General Ledger Superuser Navigation: Setup/Currencies/Rates/Types Form Name: GLXPTTYP 1. Navigate to the Conversion Rate Types window. 2. Enter a Name and Description for the new conversion rate type. 3. Save your work.

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Step 2. Define Currencies: Use the Currencies window to define non-ISO (Internationsl 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.

Responsibility: General Ledger Superuser Navigation: Setup/Currencies/Define Form Name: FNDNLDCX To define a new currency: 1. Navigate to the Currencies window. 2. Enter a unique Code to represent your currency.

Note: You cannot change a currency code after you enable the currency, even if you later disable that currency.

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3. Enter the Name and Description of the currency. 4. (Optional) Select the name of the Issuing Territory. Oracle Applications has predefined the names of countries (per ISO Standard #3166). 5. Enter the Symbol for your currency.

Note: Some Oracle Applications use currency symbols when displaying amounts. Others, like General Ledger, do not.

6. Enter the Precision of the currency to designate the number of digits to right of the decimal point used in regular currency transactions. 7. Enter the Extended Precision to designate the number of digits to the right of the decimal point used in calculations for this currency. The extended must be greater than or equal to the standard precision. Note: Some Oracle Applications use the extended precision. Others, like General Ledger, do not. 8. Enter the Minimum Accountable Unit to designate the smallest denomination used in this currency. Note: This might not correspond to the precision. 9. If you are defining the national currency of an EMU member state, define your Currency Derivation options. See: Defining European Monetary Union Relationships: page 7 10. (Optional) Enter Effective Dates for your currency. You can only enter transactions denominated in this currency for dates within the range. If you don't enter a start date, the currency is valid immediately. If you don't enter an end date, the currency is valid indefinitely. 11. Enable your currency. 12. Save your work. To enable or disable a currency: 1. Navigate to the currencies window. 2. Query the code or Name of the currency that you want to enable or disable. 3. Mark the Enabled check box to indicate that the currency can be used to enter transactions and recorded balances. Clear the check box to indicate that the currency cannot be used.

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4. Save your work. Defining European Monetary Union Relationships Oracle Applications and General Ledger include specific features for defining the relationships between the official currency (Euro) of the European Monetary Union (EMU) and the national currencies of EMU member states. For each EMU currency, you define its Euro-to-EMU fixed conversion rate (see Notes below) and the effective starting date. General Ledger comes with a predefined currency, you must activate it. To use a different currency code for the Euro, you must define a new Euro currency. Notes: • When defining a new EMU currency or creating the EMU relationship for an existing

currency, you must enter a currency derivation factor. This is the fixed conversion rate by which you multiply one Euro to derive the equivalent EMU currency amount.

• When defining a new EMU currency or creating the EMU relationship for an existing

currency, you must enter an effective starting date. This is the date on which the relationship between the EMU currency and the Euro effectively starts.

• You must create the EMU relationship for your existing currency before you enter

period rates for any period that is the same as or which follows the period of the effect starting date. Example: Your effective starting date is 04/20/1998, do not enter period rates for April or May of 1998 until you have created the EMU relationship for your existing currency. If you enter period rates first, you will have to delete those rate, then back out of the effects of any journals that used the rates, before you create the EMU relationship. Otherwise, you can corrupt your General Ledger data.

To create an EMU relationship for an existing currency: 1. Navigate to the Currencies window. 2. Query the currency for which you want to create an EMU relationship. 3. Select EMU Derived as the Currency Derivation Type. 4. Enter the Currency Derivation Factor between the Euro and the EMU currency. 5. Enter the Currency Derivation Effective starting date. 6. Save your work. We recommend that you carefully check your entered period rates before creating an EMU relationship for your existing currency. You can corrupt your General Ledger data if you have entered rates for any period that is the same as or which follows the period of

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the effective starting date, if you do so before you create the EMU relationship for your existing currency. To define a new EMU currency: 1. Follow the steps for defining a currency. See page 5. 2. While defining the currency, select EMU Derived as the Currency Derivation Type. 3. Enter the Currency Derivation Factor between the Euro and the EMU currency. 4. Enter the Currency Derivation Effective starting date. 5. Complete the steps for defining a currency. 6. Save your work. To active the predefined Euro currency: 1. Navigate to the Currencies window. 2. Query the currency Code EUR. 3. Select Euro Currency as the Currency Derivation Type. 4. Mark the Enabled check box to indicate that the currency can be used to enter transactions and record balances. 5. Save your work. To define a new Euro currency: 1. Make sure the predefined Euro currency is deactivated. 2. Follow the steps for defining a currency. See page 5. 3. While defining the currency, select Euro Currency as the Currency Derivation Type. 4. Complete the steps for defining a currency. 5. Save your work. To deactivate the predefined Euro currency: 1. Navigate to the Currencies window. 2. Query the currency Code EUR. 3. Delete any entry for the Currency Derivation Type. This field should be empty. 4. Unmark the Enabled check box to indicate that the currency cannot be used to enter transactions and record balances. 5. Save your work.

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Step 3 Define Daily Rates: General Ledger uses daily rates to perform foreign currency journal conversions. Non-EMU: You can maintain daily conversion rates between any to non-EMU currencies that you have enabled in your applications instance. EMU: You can only enter daily rates between the EMU currency and other currencies if the date precedes the EMU currency's effective starting date. 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. 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. General Ledger maintains one set of daily rates for all sets of books within a Applications instance. In earlier releases, General Ledger maintained a set of rates for each set of books. Prerequisties: • Define and enable your currencies. • Define your conversion rate types. • Have your system administrator set the profile option Daily Rates Window: Enforce

Inverse Relationship During Entry.

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Responsibility: General Ledger Superuser Navigation: Setup/Currencies/Rates/Daily Form Name: GLXRTDLY 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. If your functional currency is an EMU currency, the To-Currency defaults to the EURO. 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.

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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. Form Name: GLXRTDLY

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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. Loading Daily Rates Automatically: General Ledger provides the GL_DAILY_RATES_INTERFACE table that you can use to automatically insert, update, or delete daily rates in the GL_DAILY_RATES table. General Ledger validates the rows in the interface table before making changes in the GL_DAILY_RATES table. Warning: Always use the interface table to load your daily rates into General Ledger. Do not load rates directly into the GL_DAILY_RATES table, since this can corrupt your daily rates data.

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When General Ledger process the interface table, the system follows the behavior described below: • If you specify a range of conversion dates, the system inserts, updates, or deletes one

row in GL_DAILY_RATES for each date in your range.

For Example: From-currency: JPY To-currency: USD Conversion date range: 01-OCT-97 to 03-OCT-97 User conversion type: Spot Conversion rate: .0083 And you are inserting new rates, General Ledger will insert three new rows into GL_DAILY_RATES with the following information: JPY USD 01-OCT-97 Spot .0083 JPY USD 02-OCT-97 Spot .0083 JPY USD 03-OCT-97 Spot .0083

• General Ledger automatically inserts, updates, or deletes the corresponding inverse rates row in GL_DAILY_RATES. Using the same example as above, General Ledger will insert three additional rows into GL_DAILY_RATES with the following information.

USD JPY 01-OCT-97 Spot 120.482 USD JPY 02-OCT-97 Spot 120.482 USD JPY 03-OCT-97 Spot 120.482

The GL_DAILY_RATES_INTERFACE Table The insert, update, or deletion of rates in GL_DAILY_RATES is done automatically by database triggers on the GL_DAILY_RATES_INTERFACE table. You do not need to run any import programs. You only need to develop an automated process that populates the interface with your daily rates information.

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The columns in the GL-DAILY_RATES_INTERFACE are described below. Column Name Null? Type FROM_CURRENCY NOT NULL VARCHAR2(15) TO_CURRENCY NOT NULL VARCHAR2(15) FROM_CONVERSION_DATE NOT NULL DATE TO_CONVERSION_DATE NOT NULL DATE USER_CONVERSION_TYPE NOT NULL VARCHAR2(30) CONVERSION_RATE NOT NULL NUMBER MODE_FLAG NOT NULL VARCHAR2(1) INVERSE_CONVERSION_RATE NUMBER USER_ID NUMBER(15) ERROR_CODE VARCHAR2(30) LAUNCH_RATE_CHANGE VARCHAR2(1) CONTEXT VARCHAR2(150) ATTRIBUTE1 VARCHAR2(150) ATTRIBUTE2 VARCHAR2(150) ATTRIBUTE3 VARCHAR2(150) ATTRIBUTE4 VARCHAR2(150) ATTRIBUTE5 VARCHAR2(150) ATTRIBUTE6 VARCHAR2(150) ATTRIBUTE7 VARCHAR2(150) ATTRIBUTE8 VARCHAR2(150) ATTRIBUTE9 VARCHAR2(150) ATTRIBUTE10 VARCHAR2(150) ATTRIBUTE11 VARCHAR2(150) ATTRIBUTE12 VARCHAR2(150) ATTRIBUTE13 VARCHAR2(150) ATTRIBUTE14 VARCHAR2(150) ATTRIBUTE15 VARCHAR2(150) USED_FOR_AB_TRANSLATION VARCHAR2(1) Required and Conditionally Required Columns The field descriptions below are based on the example below. FROM_CURRENCY: The source currency applicable to the conversion rate. The amount denominated in the from-currency multiplied by the conversion rate gives the amount denominated in the to-currency. TO_CURRENCY: The target currency applicable to the conversion rate.

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FROM_CONVERSION_DATE: The starting date of the range of dates for which rows will be inserted into GL_DAILY_RATES. General Ledger will insert one row for each date in the range. Each date will have the same conversion rate you specify. TO_CONVERSION_DATE: The ending date of the range of dates fro which rows will be inserted into GL_ DAILY_RATES.

The range of dates specified by FROM_CONVERSION_DATE and TO_CONVERSION_DATE cannot exceed 366 days.

USER_CONVERSION_TYPE: The conversion type that users see displayed in the Daily Rates window. General Ledger automatically converts the user conversion type into the conversion type ID that is stored in the GL_DAILY_RATES table. CONVERSION_RATE: The currency conversion rate. This is the rate by which the amount denominated in the from-currency is multiplied to arrive at the amount denominated in the to-currency.

If the row you are entering in the interface table is to delete rates in GL_DAILEY_RATES, enter a dummy CONVERSION_RATE.

MODE_FLAG: For each row enter a D - if you want to delete matching rows from the GL_DAILY_RATES table I - if you want to insert new rows. If you specify 'I' as the MODE_FLAG and the combination or from-currency, to-currency, conversion date, and user conversion type already exist in GL_DAILY_RATES, the existing rate will be updated with the new rate you specified in the interface table. If you specify 'D' as the MODE_FLAG, General Ledger will also delete corresponding inverse rates rows in GL_DAILY_RATES. Any rows you enter in GL_DAILY_RATES_INTERFACE that fail validation will remain in the interface table and will not be moved to GL_DAILY_RATES. Also, the mode flag will change to X and the error code column will be populated. Use a SQL*Plus SELECT Statement to check for any of the rows you loaded into the interface table failed validation. You cannot reprocess rejected rows that remain in the interface table after failing validation. To process the correct data, you must first delete the rejected rows from the interface table then enter the correct data as new rows in the table. The new data will be processed as usual.

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Optional Columns: INVERSE_CONVERSION_RATE: The inverse of the conversion rate. This is the rate by which the amount denominated in the to-currency is multiplied to arrive at the amount denominated in the from-currency. If you do not provide this value, General Ledger will calculate the inverse rate from the CONVERSION_RATE column and insert the appropriate inverse rate rows into GL_DAILY_RATES. USER_ID: The user ID of the person who is adding rows to the interface table. To determine the user ID for a specific user name, use the following SQL*Plus statement: select user_id from fnd_user where user.name='<user name>' LAUNCH_RATE_CHANGE: If you want the rate change program to run automatically, enter a 'Y' in LAUNCH_RATE_CHANGE column for one row of the rates you are loading. Leave this column blank for the remaining rows. Otherwise, multiple concurrent requests will launched when only one is required to load all of your rates. When a daily rate has changed, the rate change program will outdate average translations in those average balance sets of books that use the changed daily rate. CONTEXT: The descriptive flexfield context. ATTRIBUTE1 through ATTRIBUTE15: Any descriptive flexfield information associated with the daily rate. Other Columns: ERROR_CODE: The text of the error message you receive if the row in the interface table failed validation. This column is used by the system. No user entry is needed. USED_FOR_AB_TRANSLATION: This column is used internally by General Ledger when coping rates to GL_DAILY_RATES. Do not make any entries in this column.

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Step 4 Enter Foreign Currency Journals (Automatic Conversion) You can enter manual journal entries using a foreign currency. EMU and Non-EMU Currencies EMU currencies, such as the French Franc, have a fixed exchange rate with the euro. General Ledger can derive exchange rates between EMU and Non-EMU currencies based on a rate you enter between the euro and Non-EMU currencies. To do so, set the profile option: Allow Direct EMU/Non-EMU User Rate to No. Complete the fields in the Currency region of the Enter Journals window before you enter your journals using this rate. Example: 1. Set the profile option, Allow Direct EMU/Non-EMU User Rate to No. 2. You are entering a journal in French Francs in a USD set of books. 3. In the Enter Journals window, choose French Francs as the Currency. 4. In the Type field, choose User from the list of values. 5. Enter the USD to euro rate and press the Tab key. 6. General Ledger automatically calculates the USD to French Franc rate based on the Euro to USD rate you entered, and displays it in the USD to French Franc field. 7. Choose OK to accept the General Ledger rate calculation for your journal. The new calculated rate appears in the Rate field of the Enter Journals window. 8. Enter your journals.

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To enter a foreign currency journal:

Responsibility: General Ledger Superuser Navigation: Journals/Enter Form Name: GLXJEENT 1. Navigate to the Enter Journals window. 2. Enter optional batch information. 3. Enter your journal information, specifying the foreign Currency you want to use for your journal entry. 4. Enter the journal currency conversion information.

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• The conversion Date must be within the accounting period you defined for the journal

entry. The conversion date is the posting date for the journal entry, and the default Effective Date shown in the More Details window.

• The conversion Type can be Spot, Corporate, User or any conversion type you

defined. • You must enter a conversion Rate if you enter User as the conversion type. If you

specify a conversion type other User, General Ledger automatically enters the daily conversion rate based on the rate you entered in the Daily Rates window.

If you are entering a transaction involving an EMU and Non-EMU currency, and the profile option: Allow Direct EMU/Non-EMU User Rates is set to No, enter the rate between the euro and the Non-EMU currency in the pop-up window. General Ledger automatically calculates the exchange rate based on the Euro to Non-EMU rate you entered. Choose OK to accept the calculated rate.

5. Enter your journal lines, using debit and credit amounts in the foreign currency. General Ledger automatically converts the entry amounts into your functional currency based on the designated conversion date. 6. Use the scrolling region to review the results of your currency conversion. You can override the Converted Debit and Converted Credit if you enable the user profile option Journals: Allow Multiple Exchange Rates.

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Reports Daily Conversion Rates Listing 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: When you request this listing, General Ledger prompts you to enter the following: 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.

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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. Currency: Allow Direct EMU/Non-EMU User Rates Use this profile option to allow a General Ledger to derive an exchange rate between an EMU and Non-EMU currency, based on a rate you enter between the euro and a Non-EMU currency. This profile option applies to the Enter Journals and Period Rates windows only.

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All EMU's have a fixed exchange rate with the euro. Floating rates exist only between euro and Non-EMU currencies. Enter Journals window: Set this profile option to No and you can enter a journal involving an EMU and Non-EMU currency, choose User as the exchange rate type and enter your rate between the euro and the Non-EMU currency. General Ledger calculates a rate between the EMU and Non-EMU currency for your journal. The default value for this profile option is Yes. 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.

Patches 1104352 - Track Rounding Imbalances (Release 11.0.3) Patch 1104352 is included in 11.0.3 GL Patchset E. Problem: Current functionality does not allow the user to track rounding differences due to currency conversion in a separate account. Solution: The posting program has been fixed to allow this. A new checkbox, Track Rounding Imbalances has been created on the Define Set of Books form. If checked, the Rounding Differences account must be entered. Any rounding differences will be accumulated in this account. If unchecked, the existing functionality of adding the rounding difference to the largest debit/credit line will persist. Prerequisites included in this patch: 678691, 717146, 742634, 810966, 860659, 905431. 1297119 - GIS Intercompany Transfer program not finding the currency conversion rate (Release 11.0). Problem: The GIS Intercompany Transfer Program was using only the seeded currency conversion rates. Solution: This has been fixed so that user defined currency conversion rates can also be used. Prerequisites patches included: 944057 1347866 - GL: Performance problem with TO_CURRENCY LOV when requesting GLXRDRTS (Release 11.0) When submitting a request for the 'Currency - Daily Conversion Rates Listing' report (GLXRDRTS), the list of values for the 'To Currency' parameter was taking a long time to be displayed. This patch fixes this performance problem by modifying the GL_SRS_CURRENCY_RATES_TO validation set.

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It also contains the following enhancement. The list of values now only displays currencies for which the report would contain some data. It is no longer possible to choose a currency such that no data is found in the report.