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<ManualTopic ID="/baanerp/tf/integrations/400035" xml:lang="en">
   <Header>
      <Title>Currency differences accounts</Title>
      <Keyword type="header" order="d1e1597375">
         <Level1>Reconciliation</Level1>
         <Level2>currency differences</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1597380">
         <Level1>Currency differences</Level1>
         <Level2>reconciliation</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1597385">
         <Level1>Accounts</Level1>
         <Level2>currency differences</Level2>
      </Keyword>
      <Keyword type="header" order="d1e1597390">
         <Level1>Currency differences</Level1>
         <Level2>accounts</Level2>
      </Keyword>
   </Header>
   <GeneralSection>
      <List>
         <ListIntro>
            <Link href="/baanerp/tf/glossary/glossary#CurrenDiffer_tf" role="glossary">Currency differences</Link> can make the
		  financial analysis and reconciliation more complex. These types of currency
		  differences can occur:</ListIntro>
         <ListItemHead>Currency differences</ListItemHead>
         <ListItem>Currency result caused by fluctuations in the exchange rate,
		  for example, if the rate differs between the invoice date and the payment date.</ListItem>
         <ListItemHead>Exchange gain and loss</ListItemHead>
         <ListItem>Currency result caused by the use of different exchange rate
		  types, for example, the <GUIRef href="/baanerp/tc/domains/trtp#sales" role="option">Sales</GUIRef> rate
		  type and the <GUIRef href="/baanerp/tc/domains/trtp#internal" role="option">Internal</GUIRef> rate type, or if by means of the rate
		  determiner you have changed the exchange rate for a transaction during the
		  order handling procedure.</ListItem>
         <ListItemHead>Translation gain and loss</ListItemHead>
         <ListItem>Currency result caused by the use of different currencies
		  during the order handling procedure, for example, if the order currency or the
		  payment currency differs from the invoice currency.</ListItem>
         <ListItemHead>Destination gain and loss</ListItemHead>
         <ListItem>Currency result caused by different results when the
		  transaction currency is converted to the various home currencies. Destination
		  gain and loss can only occur 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 these 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>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. The exchange gain and loss is calculated at the time when you post the
		integration transactions to the <GUIRef href="/baanerp/tf/gld" role="module">General Ledger</GUIRef>.</Paragraph>
      <List>
         <ListIntro>The difference amounts are posted to the statutory account
		  that you can select for each company or currency:</ListIntro>
         <ListItem>For a company, in the <GUIRef href="/baanerp/tf/gld/tfgld0503m000#tfgld004.dgla" role="manual">Statutory Exchange Gain/Loss Account</GUIRef> field on the <GUIRef href="/baanerp/tf/gld/tfgld0503m000#tfgld0103sDF6" role="groupbox">Destination Gain/Loss</GUIRef> tab of the <GUIRef href="/baanerp/tf/gld/tfgld0503m000" role="session">Company Parameters (tfgld0503m000)</GUIRef> session.</ListItem>
         <ListItem>For a currency, in the <GUIRef href="/baanerp/tf/gld/tfgld0129m000#tfgld029.dgla" role="manual">Statutory Exchange Gain/Loss Account</GUIRef> field of the <GUIRef href="/baanerp/tf/gld/tfgld0129m000" role="session">Additional Currency Features (tfgld0129m000)</GUIRef> session.</ListItem>
      </List>
      <ExampleSection>
         <SectionTitle>Example of Exchange Gain and
		  Loss</SectionTitle>
         <List>
            <ListIntro>To a purchase order, this data applies:</ListIntro>
            <ListItem>Purchase order amount: 100 USD</ListItem>
            <ListItem>Local currency: EUR</ListItem>
            <ListItem>Internal exchange rate: 1 USD = 0.937012 EUR</ListItem>
            <ListItem>Purchase exchange rate: 1 USD = 0.936344 EUR</ListItem>
         </List>
         <Paragraph>This results in these postings for the <GUIRef href="" role="manual">Purchase Order/Receipt</GUIRef> transaction:</Paragraph>
         <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
            <TBODY noTR="4">
               <TR no="1" isLast="false">
                  <TH width="54" rowspan="1" colspan="1">Type</TH>
                  <TH width="170" rowspan="1" colspan="1">Account</TH>
                  <TH width="117" rowspan="1" colspan="1">Amount (Debit)</TH>
                  <TH width="148" rowspan="1" colspan="1">Amount (Credit)</TH>
               </TR>
               <TR no="2" isLast="false">
                  <TD width="54" rowspan="1" colspan="1">Debit</TD>
                  <TD width="170" rowspan="1" colspan="1">Interim Transit</TD>
                  <TD width="117" rowspan="1" colspan="1">93.70 EUR</TD>
                  <TD width="148" rowspan="1" colspan="1">-</TD>
               </TR>
               <TR no="3" isLast="false">
                  <TD width="54" rowspan="1" colspan="1">Credit</TD>
                  <TD width="170" rowspan="1" colspan="1">Invoice Accrual</TD>
                  <TD width="117" rowspan="1" colspan="1">-</TD>
                  <TD width="148" rowspan="1" colspan="1">93.63
				  EUR</TD>
               </TR>
               <TR no="4" isLast="true">
                  <TD width="54" rowspan="1" colspan="1">Credit</TD>
                  <TD width="170" rowspan="1" colspan="1">Exchange Gain and
				  Loss</TD>
                  <TD width="117" rowspan="1" colspan="1">-</TD>
                  <TD width="148" rowspan="1" colspan="1">0.07
				  EUR</TD>
               </TR>
            </TBODY>
         </TABLE>
      </ExampleSection>
   </GeneralSection>
   <GeneralSection ID="translation">
      <SectionTitle>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, these 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/tfgld0503m000" role="session">Company Parameters (tfgld0503m000)</GUIRef> session. For the Currency Translation accounts, do <Emphasis>not</Emphasis> set the <GUIRef href="/baanerp/tf/gld/tfgld0508m000#tfgld008.icur" role="manual">Currency Analysis</GUIRef> field to <GUIRef href="/baanerp/tc/domains/icur#difference" role="option">Required, Calculate Currency Diff.</GUIRef> in the <GUIRef href="/baanerp/tf/gld/tfgld0508m000" role="session">Chart of Accounts (tfgld0508m000)</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, these postings are
		  made:</Paragraph>
         <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
            <TBODY noTR="11">
               <TR no="1" isLast="false">
                  <TH width="137" rowspan="1" colspan="1">Event</TH>
                  <TH width="63" rowspan="1" colspan="1">Type</TH>
                  <TH width="22%" rowspan="1" colspan="1">Account</TH>
                  <TH width="343" rowspan="1" colspan="1">Currency</TH>
               </TR>
               <TR no="2" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Receipt</TD>
                  <TD width="63" rowspan="1" colspan="1">Debit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Inventory</TD>
                  <TD width="343" rowspan="1" colspan="1">Local currency converted from USD, with order
				  rate.</TD>
               </TR>
               <TR no="3" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Receipt</TD>
                  <TD width="63" rowspan="1" colspan="1">Credit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Invoice Accrual</TD>
                  <TD width="343" rowspan="1" colspan="1">USD</TD>
               </TR>
               <TR no="4" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Invoice registration</TD>
                  <TD width="63" rowspan="1" colspan="1">Debit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Registered Invoices</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
               <TR no="5" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Invoice registration</TD>
                  <TD width="63" rowspan="1" colspan="1">Credit</TD>
                  <TD width="22%" rowspan="1" colspan="1">ACP Control Account</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
               <TR no="6" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Invoice approval</TD>
                  <TD width="63" rowspan="1" colspan="1">Debit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Invoice Accrual</TD>
                  <TD width="343" rowspan="1" colspan="1">USD, converted from CAD, with invoice rate.</TD>
               </TR>
               <TR no="7" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Invoice approval</TD>
                  <TD width="63" rowspan="1" colspan="1">Credit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Registered Invoices</TD>
                  <TD width="343" rowspan="1" colspan="1">USD</TD>
               </TR>
               <TR no="8" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Payment</TD>
                  <TD width="63" rowspan="1" colspan="1">Debit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Currency translation</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
               <TR no="9" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Payment</TD>
                  <TD width="63" rowspan="1" colspan="1">Credit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Currency translation</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
               <TR no="10" isLast="false">
                  <TD width="137" rowspan="1" colspan="1">Payment</TD>
                  <TD width="63" rowspan="1" colspan="1">Debit</TD>
                  <TD width="22%" rowspan="1" colspan="1">ACP Control Account</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
               <TR no="11" isLast="true">
                  <TD width="137" rowspan="1" colspan="1">Payment</TD>
                  <TD width="63" rowspan="1" colspan="1">Credit</TD>
                  <TD width="22%" rowspan="1" colspan="1">Bank account</TD>
                  <TD width="343" rowspan="1" colspan="1">CAD</TD>
               </TR>
            </TBODY>
         </TABLE>
      </ExampleSection>
   </GeneralSection>
   <GeneralSection ID="curr.diff">
      <SectionTitle>Currency Differences contra account</SectionTitle>
      <Paragraph>Currency differences are calculated and posted to a Currency
		Differences contra account.</Paragraph>
      <Paragraph>For every Operations Management transaction (for every
		reconciliation area), LN provides a separate integration document type for the mapping of
		the currency differences. The transaction type used to post the currency
		differences must be of the <GUIRef href="/baanerp/tf/domains/gld.catg#journals" role="option">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>These rules apply to the Currency Differences 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 Differences contra account for the ledger account.</ListItem>
         <ListItem>The Currency Differences contra account must have the same
		  parent account as the account to which it is linked.</ListItem>
         <ListItem>The Currency Differences contra account must be a <GUIRef href="/baanerp/tf/domains/gld.duac#statutory" role="option">Statutory</GUIRef> account of the <GUIRef href="/baanerp/tf/domains/gld.atyp#balance" role="option">Balance Sheet</GUIRef> type. As the account is a control account, you cannot create
		  manual transactions on the account.</ListItem>
         <ListItem>In the <GUIRef href="/baanerp/tf/gld/tfgld0508m000" role="session">Chart of Accounts (tfgld0508m000)</GUIRef> session, on the <GUIRef href="/baanerp/tf/gld/tfgld0508m000#tfgld.dims" role="groupbox">Dimensions</GUIRef> tab, the settings of the Currency
		  Differences contra account must match the corresponding settings of the newly
		  created ledger account to which it is linked. If they do not match, LN will prompt you to
		  make the settings match. Provided that the <GUIRef href="/baanerp/tf/gld/tfgld0508m000#tfgld008.inta" role="manual">Integration Account</GUIRef> check box is unavailable, the
		  same (new) account can be used as contra account as well. In that case, the
		  dimension options can be selected as required.</ListItem>
      </List>
      <List>
         <ListIntro>Some examples of accounts that require a Currency Differences
		  contra account are:</ListIntro>
         <ListItem>From the integrations: WIP 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/50050_lst" role="manual">Integration document types - Currency Difference</Link>
      </RelTopic>
      <RelTopic>
         <Link href="/baanerp/tf/integrations/400034" role="manual">The reconciliation process</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>