Check Exchange Rate Types
Exchange rates for different purposes for the same date are defined in the system as exchange rate types (you cannot delete existing entries).
If you need to carry out currency translations between a number of different currencies, you can simplify exchange rate maintenance by entering a base currency for the exchange rate type. Instead of entering translation rates between every single currency, you then only need specify the translation rate between each currency and the base currency. All currency translations then take place in two steps - into the base currency and from the base currency into the target currency.
The base currency is DEM. You want to translate FRF to CHF. To do this, the following entries must be made in the table for maintaining currency translation rates:
Ratio for FRF DEM
Ratio for CHF DEM
Translation from FRF to CHF is then carried out automatically. The translation is done as though this exchange rate (FRF CHF) was actually entered in the conversion table.
In this example, the base currency (DEM) is the To-currency and FRF or CHF the From-currency.
For exchange rate relations within the EU, it is a legal requirement that the base currency (EUR) is the From-currency. You set the indicator for this in the BCurr=from field.
When posting and clearing documents, the system uses the exchange rate type "M" for foreign currency translation. This exchange rate type must be contained in the system.
The standard system includes the exchange rate types for the bank buying rate (G), bank selling rate (B), and average rate (M).
You can have the system calculate the bank buying or selling rates from the average rate and the spread. The term spread refers to the difference between the average rate and the bank buying rate, or between the average rate and selling rate. You can find more information on this in the documentation on the activity Maintain spreads.
1. Find out which exchange rate types are needed in your company.
2. Check the standard exchange rate types. Create additional exchange rate types if necessary.
3. If you want to specify that all currency translations for a rate type must be carried out using a base currency, enter a currency (such as the group currency) in the Base cur field.
4. If you want to use the base currency specified as the From-currency, select the BCurr=from field.
5. If you want to have the system calculate the buying and selling rates from the average rate and the spread, enter the rate type for the average rate in the Buy.rt.to or Sell.rt.to field. Then maintain the spreads under the activity Maintain spreads.
6. If you want to use the inverted rate for translating two currencies, select the Inv field.
Note: The reversed rate is used only if you have not made an entry for the corresponding exchange rate in the activity Enter exchange rates.
7. If you want to calculate the amounts according to the European Monetary Union's legal directives, select the EMU field.
8. If you want the system to check whether the application uses an exchange rate other than the fixed exchange rate, select the indicator in the Fixed field.
This indicator must be set for the exchange rate type that is used for currency translation within the EMU.