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<ManualTopic ID="/baanerp/tf/integrations/400035" xml:lang="en">
	<Header>
		<Title xmlns:ssa="http://www.ssaglobal.com" xmlns:HTML="http://www.w3.org/TR/REC-html40">Currency differences interim accounts</Title>
		<Keyword><Level1>Reconciliation</Level1>
			<Level2>Currency dfferences</Level2>
		</Keyword>
	</Header>
	<GeneralSection><List><ListIntro>The currency differences can make the financial analysis and reconciliation more complex. The following types of currency differences can occur:</ListIntro>
			<ListItem><Link href="/baanerp/tf/glossary/glossary#CurrenDiffer.tf" role="glossary">Currency differences</Link>
			</ListItem>
			<ListItem><Link href="/baanerp/tf/glossary/glossary#000444" role="glossary">Exchange gain and loss</Link>
			</ListItem>
			<ListItem><Link href="/baanerp/tf/glossary/glossary#TranslGain.tf" role="glossary">Translation gain and loss</Link>
			</ListItem>
			<ListItem><Link href="/baanerp/tf/glossary/glossary#000445" role="glossary">Destination gain and loss</Link>, only in an <Link href="/baanerp/tc/glossary/glossary#000025" role="glossary">independent currency system</Link>.</ListItem>
		</List>
		<List><ListIntro>To support good reconciliation possibilities, currency differences and exchange gain and loss are posted to the following interim accounts:</ListIntro>
			<ListItemHead>Exchange Gain and Loss</ListItemHead>
			<ListItem>For differences between related amounts (debit and credit postings) due to different exchange rate types or different currency rates.</ListItem>
			<ListItemHead>Currency Translation</ListItemHead>
			<ListItem>For transactions of which the debit posting and the credit posting are made in different currencies.</ListItem>
			<ListItemHead>Currency Differences contra-account</ListItemHead>
			<ListItem>For currency differences on the invoice accrual account due to rate changes between the receipt date and the approval date of the invoice and calculated when you close a financial period.</ListItem>
		</List>
	</GeneralSection>
	<GeneralSection ID="exchange.gain.loss"><SectionTitle>The Exchange Gain and Loss account</SectionTitle>
		<Paragraph>Differences between related amounts due to different exchange rate types or different currency rates are posted to an Exchange Gain and Loss account.</Paragraph>
		<Paragraph>In a single currency system and a dependent multicurrency system, the exchange gain and loss is calculated at the time when you post the integration transactions to the general ledger. The difference amounts are posted to the <GUIRef href="" role="manual">Destination Gain /Loss for Integration Transactions</GUIRef> account that you select for the financial company in the <GUIRef href="/baanerp/tf/gld/tfgld0103s000" role="session">Company Parameters (tfgld0103s000)</GUIRef> session.</Paragraph>
		<ExampleSection><SectionTitle>Example of Exchange Gain and Loss</SectionTitle>
			<List><ListIntro>To a purchase order, the following data applies:</ListIntro>
				<ListItem>Purchase order amount: 100 USD</ListItem>
				<ListItem>Local currency: EUR</ListItem>
				<ListItem>Purchase exchange rate: 1 USD = 0,937012 EUR</ListItem>
				<ListItem>Internal exchange rate: 1 USD = 0,936344 EUR</ListItem>
			</List>
			<Paragraph>This results in the following postings for the <GUIRef href="" role="manual">Purchase Order/Receipt</GUIRef> transaction:</Paragraph>
			<TABLE border="1"><TBODY><TR><TH>Type</TH>
						<TH>Account</TH>
						<TH>Amount (Debit)</TH>
						<TH>Amount (Credit)</TH>
					</TR>
					<TR><TD>Debit</TD>
						<TD>Interim Transit</TD>
						<TD>93,70 EUR</TD>
						<TD></TD>
					</TR>
					<TR><TD>Credit</TD>
						<TD>Invoice Accrual</TD>
						<TD></TD>
						<TD>93,70 EUR</TD>
					</TR>
					<TR><TD>Credit</TD>
						<TD>Exchange Gain and Loss</TD>
						<TD></TD>
						<TD>0,07 EUR</TD>
					</TR>
				</TBODY>
			</TABLE>
		</ExampleSection>
	</GeneralSection>
	<GeneralSection><SectionTitle>The Currency Translation account</SectionTitle>
		<Paragraph>Related amounts in different currencies are posted to a Currency Translation account. Every transaction in different currencies on the Invoice Accrual account has a one-to-one relationship to a transaction on the Currency Translation account.</Paragraph>
		<Paragraph>For example, if a sales order amount is expressed in USD and the invoice currency is CAD, the sales order amount and the invoice amount are posted to the Currency Translation account. When you approve the invoice, the invoice amount is converted to the order currency with the currency rate of the invoice date and time.</Paragraph>
		<List><ListIntro>If the calculated order amount differs from the original order amount, the following rules apply:</ListIntro>
			<ListItem>If the difference is due to currency rate changes between the order date and the invoice date, the difference is posted according to the mapping defined for the <GUIRef href="" role="manual">Currency Differences</GUIRef> integration document type.</ListItem>
			<ListItem>If no currency rate changes occurred, the difference amounts are posted according to the mapping defined for the <GUIRef href="" role="manual">Purchase Order/Price Variance</GUIRef> integration document type, using the Currency Translation account as an interim account.</ListItem>
		</List>
		<Paragraph>You can select the Currency Translation accounts and dimensions for the financial company in the <GUIRef href="/baanerp/tf/gld/tfgld0103s000" role="session">Company Parameters (tfgld0103s000)</GUIRef> session. For the Currency Translation accounts, do <Emphasis>not</Emphasis> set the <GUIRef href="/baanerp/tf/gld/tfgld0108s000#tfgld008.icur" role="formfield">Currency Analysis</GUIRef> field to <GUIRef href="/baanerp/tc/domains/icur#difference" role="enum">Required, Calculate Currency Diff.</GUIRef> in the <GUIRef href="/baanerp/tf/gld/tfgld0108s000" role="session">Chart of Accounts (tfgld0108s000)</GUIRef> session.</Paragraph>
		<ExampleSection><SectionTitle>Example of currency translation</SectionTitle>
			<Paragraph>The order currency of a purchase order is USD and the invoice currency is CAD. For the integration transactions, the following postings are made:</Paragraph>
			<TABLE border="1"><TBODY><TR><TH width="147">Event</TH>
						<TH width="56">Type</TH>
						<TH width="21%">Account</TH>
						<TH width="278">Currency</TH>
					</TR>
					<TR><TD width="147">Receipt</TD>
						<TD width="56">Debit</TD>
						<TD width="21%">Inventory</TD>
						<TD width="278">Local currency converted from USD, with order rate.</TD>
					</TR>
					<TR><TD width="147">Receipt</TD>
						<TD width="56">Credit</TD>
						<TD width="21%">Invoice Accrual</TD>
						<TD width="278">USD</TD>
					</TR>
					<TR><TD width="147">Invoice registration</TD>
						<TD width="56">Debit</TD>
						<TD width="21%">Registered Invoices</TD>
						<TD width="278">USD</TD>
					</TR>
					<TR><TD width="147">Invoice registration</TD>
						<TD width="56">Credit</TD>
						<TD width="21%">ACP Control Account</TD>
						<TD width="278">CAD</TD>
					</TR>
					<TR><TD width="147">Invoice approval</TD>
						<TD width="56">Debit</TD>
						<TD width="21%">Invoice Accrual</TD>
						<TD width="278">USD, converted from CAD, with invoice rate.</TD>
					</TR>
					<TR><TD width="147">Invoice approval</TD>
						<TD width="56">Credit</TD>
						<TD width="21%">Currency translation</TD>
						<TD width="278">USD</TD>
					</TR>
					<TR><TD width="147">Payment</TD>
						<TD width="56">Debit</TD>
						<TD width="21%">Currency translation</TD>
						<TD width="278">CAD</TD>
					</TR>
					<TR><TD width="147">Payment</TD>
						<TD width="56">Credit</TD>
						<TD width="21%">Registered Invoices</TD>
						<TD width="278">CAD</TD>
					</TR>
					<TR><TD width="147">Payment</TD>
						<TD width="56">Debit</TD>
						<TD width="21%">ACP Control Account</TD>
						<TD width="278">CAD</TD>
					</TR>
					<TR><TD width="147">Payment</TD>
						<TD width="56">Credit</TD>
						<TD width="21%">Bank account</TD>
						<TD width="278">CAD</TD>
					</TR>
				</TBODY>
			</TABLE>
		</ExampleSection>
	</GeneralSection>
	<GeneralSection ID="curr.diff"><SectionTitle>The Currency Differences contra account</SectionTitle>
		<Paragraph><Link href="/baanerp/tf/glossary/glossary#CurrenDiffer.tf" role="glossary">Currency differences</Link> are calculated and posted to a Currency Differences contra account.</Paragraph>
		<Paragraph>For every Operations Management transaction (for every reconciliation area), SSA ERP provides a separate integration document type for the mapping of the currency difference. The transaction type used to post the currency difference must be of the <GUIRef href="/baanerp/tf/domains/gld.catg#journals" role="enum">Journal Vouchers</GUIRef> category.</Paragraph>
		<Paragraph>All postings on the Invoice Accrual account are made in the transaction currencies. Therefore, if you run the <GUIRef href="/baanerp/tf/gld/tfgld5201m000" role="session">Calculate Currency Differences (tfgld5201m000)</GUIRef> session when you close a financial period, these transactions are included in the process. Differences between the receipt amount and the invoice amount due to rate changes between the receipt date and the approval date of the invoice are posted to a separate contra account for currency differences on the invoice accrual.</Paragraph>
		<List><ListIntro>The following rules apply to the Currency Difference contra accounts:</ListIntro>
			<ListItem>A unique contra account is linked to each ledger account on which the transaction currency can be different from the home currencies. When you create such a ledger account, for example, a WIP account or a Cash account, you must define the Currency Difference contra account for the ledger account. The Currency Difference contra account must have the same parent account as the account to which it is linked.</ListItem>
			<ListItem>The Currency Difference contra account must be a <GUIRef href="/baanerp/tf/domains/gld.duac#statutory" role="enum">Statutory</GUIRef> account of the <GUIRef href="/baanerp/tf/domains/gld.atyp#balance" role="enum">Balance Sheet</GUIRef> type and in the <GUIRef href="/baanerp/tf/gld/tfgld0108s000#tfgld008.icur" role="formfield">Currency Analysis</GUIRef> field, you must select <GUIRef href="/baanerp/tc/domains/icur#difference" role="enum">Required, Calculate Currency Diff.</GUIRef> in the <GUIRef href="/baanerp/tf/gld/tfgld0108s000" role="session">Chart of Accounts (tfgld0108s000)</GUIRef> session. As the account is a control account, you cannot create manual transactions on the account.</ListItem>
		</List>
		<Paragraph>Some examples of accounts that require a Currency Difference contra account are:</Paragraph>
		<List><ListItem>From the integrations: WIP accounts, GRNI accounts, and GDNI accounts.</ListItem>
			<ListItem>Internally in <GUIRef href="/baanerp/tf" role="package">Financials</GUIRef>: Bank accounts, Cash accounts and so on.</ListItem>
		</List>
	</GeneralSection>
	<RelatedTopics><SectionTitle>Related topics</SectionTitle>
		<RelTopic><Link href="/baanerp/tf/integrations/400030" role="manual">Reconciliation overview</Link>
		</RelTopic>
		<RelTopic><Link href="/baanerp/tf/onlinemanual/000107" role="manual">Currency differences</Link>
		</RelTopic>
		<RelTopic><Link href="/baanerp/tf/integrations/400034" role="manual">The reconciliation process</Link>
		</RelTopic>
	</RelatedTopics>
</ManualTopic>
