Currencies are required to process business transactions, to create bookings for the general ledger, etc. Currencies are stored in the database using their respective ISO code for currencies.
The application enables a history of exchange rates to be maintained which can then be used during settlement and the processing of business transactions. The relevant rates can be used simply by entering the date. Margins for selling/buying rates are regarded in accordance with the administration of currencies.
In addition to the use of the stored exchange rates, it is possible to adjust the rate during transaction processing. This function as well as its availability can be adjusted during the implementation phase of the system. Furthermore, it is possible to use an external interface for the administration of exchange rates which is not included in the application and has to be adjusted at user's end.
Rates cannot be amended nor deleted if they have been used in a settlement and the relevant contract is still in the database (whether closed, or not). Currencies cannot be deleted if they are still used in contracts, or if rates for these currencies are still stored.
Deleting a currency has a major impact on the way the application works. Consequently, it needs to handled with care and with the help of the support staff.
Note:
Effective January 1, 1999 all European Economic and Monetary Union (EMU) participating countries converted the way in which exchange rates are presented - from a direct (price) to an indirect (bulk fixing) quotation. Rates no longer indicate how much a fixed unit of a foreign currency costs in EUR (e.g. 1 USD = EUR 0.79415), but how much you receive for EUR 1 (e.g. EUR 1 = USD 1.25921).
In the German version of the application this affects the previous concepts of “Geldkurs” and “Briefkurs”, that were not used in a uniform way. The application now uses the concepts of “Ankaufskurs” (buying rate) and “Verkaufskurs” (selling rate) instead.
Whether margins are added to, or subtracted from, the average rate in order to calculate the selling/buying rate, or any other derived rates, depends on whether rates are handled using direct or indirect quotation methods. The direct/indirect quotation setting in the application is made in the appropriate field in the Entity Group (DBIETG). If nothing is defined, the indirect quotation will be used for EUR or GBP system currencies; all other system currencies will use the direct quotation method.
To simplify the administration of daily rates, there is a special table used to enter daily rates.