General Ledger uses daily rates to perform foreign currency journal Conversions, revaluation, and translation/remeasurement. You can maintain daily conversion rates between any two currencies that you are enabled in your applications instance. In addition, you can enter a single exchange rate for a range of dates in the Enter Rates By Date Range window. The date range can span multiple days or periods.
If you use Reporting Currencies (journal or subledger level), your daily rates are used to convert your ledger's journals to the appropriate reporting currencies during posting. Your daily rates must be defined before you post journals in your ledger.
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 ledger currency, for the specified date and rate type. General Ledger calculates functional debit and credit equivalents by multiplying the debits and credits entered in a foreign currency by the retrieved daily rate.
See: Entering Entered Currency Journals.
According to SFAS #52 and IAS 21, the period-end rate represents the rate at the balance sheet date and the period-average rate represents the average exchange rate. General Ledger uses Period - average and period-end rates when you translate your actual and budget account balances.
Typically, you use period-average rates to translate income statement accounts and period-end rates to translate balance sheet accounts. The default period-average and period-end rate types must be assigned when you create the ledger.
Oracle General Ledger enables you to assign a conversion rate type for your period-end and period-average rates to comply with the accounting standards. You can assign any conversion rate type as your period-average and period-end rates for the ledger. For example, you can assign the predefined rate type Spot to be used as your period-average rates and the predefined rate type Corporate to be used as your period-end rates. These rate types are used in translation of actual account balances.
For budget account balances, you can specify the period-end and period-average rate types when you submit the translation.
To define your period-end and period-average rates:
Create a new conversion rate type or use a predefined rate type in the Conversion Rate Type window.
Enter rates for the conversion rate type in the Daily Rates window.
If your conversion rate type is assigned to a definition access set, you must have Modify and View privileges to enter rates for the conversion rate type.
Assign the conversion rate type to the period-end and period-average rates for your ledger using the Accounting Setup Manager.
Note: If you change a period-average or period-end rate for a period in which you have already run translation, you must retranslate your account balances for that period.
Defining Conversion Rate Types
If you have average balance processing enabled in your ledger, 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 ledgers within an Applications instance. You can use Definition Access Sets to control access to your daily rates by securing the conversion rate types. For example, you can prevent certain users from viewing, updating, or creating rates using your conversion rate type.
The following table explains what Use, View, and Modify privileges mean for the Conversion Rate Type definition in the Conversion Rate Type and Daily Rates windows.
| Window | Use Privilege | View Only Privilege | Modify Privilege (with View Privilege) |
|---|---|---|---|
| Conversion Rate Type | Use or assign the rate type when entering journals, defining MassAllocations, running Revaluations, assigning period-average and period-end rate types, etc. | View Rate Type | Update conversion rate type name or description |
| Daily Rates | Not Applicable | View daily rates associated with the conversion rate type | Create, update, and delete daily rates associated with the conversion rate type |
Define and enable your currencies.
Define your conversion rate types.
Additional Information: If you want to enter different daily rates for the same combination of from - currency, to - currency, and conversion date, you must define separate conversion rate types.
See: Defining Conversion Rate Types.
Have your system administrator set the profile option Daily Rates Window: Enforce Inverse Relationship During Entry.
You can use the Daily Rates window or Currency Rates Manager to enter: daily rates, daily rates by date range, and daily rates using a spreadsheet. See: Currency Rates Manager.
Navigate to the Daily Rates window.
Enter the From-Currency - the currency you want to convert from using the rates you enter. You can choose any enabled currency except STAT.
Enter the To - Currency - the currency to which you want to convert. If you enter the same currency as your from - currency, you will receive an error.
Enter the Conversion Date and Type. When you use this date and rate type to enter journals, General Ledger automatically displays the rate you define here.
You cannot select the rate type of User. Enter User rate directly on the Enter Journal window when creating a foreign entered journal.
If your conversion rate type is assigned to a definition access set, you must have Modify and View privileges to the conversion rate type to create new rates.
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.
If the profile option is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
Enter a rate in the first column that converts your from-currency to your to-currency. This is the rate that you multiply your from-currency amount by to determine the to-currency equivalent. For example, to convert AUD to USD (Australian Dollars to U.S. Dollars), enter .7793 if the rate is .7793 U.S. dollars per Australian dollar.
Enter a rate in the second column that converts your to-currency to your from-currency. This is the rate that you multiply your to-currency amount by to determine the from-currency equivalent. For example, to convert USD to AUD (U.S. Dollars to Australian Dollars), enter 1.2832 if the rate is 1.2832 Australian dollars per U.S. dollar.
Note: If you have the profile option Journals: Display Inverse Rate set to Yes, General Ledger will display inverse exchange rates in the Enter Journals and other windows. For example, assume that the profile option is set to Yes and your ledger currency is USD. If you enter the AUD to USD rate as .7793 in the Daily Rates window, General Ledger will display the inverse rate, or 1.2832, in the Enter Journals window when you create a foreign currency journal using AUD as the foreign currency.
Navigate to the Daily Rates window.
Choose the Enter by Date Range button.
The Enter Rates By Date Range window appears.
Enter the From-Currency - the currency you want to convert from using the rates you enter. You can choose any enabled currency except STAT.
Enter the To - Currency - the currency to which you want to convert. If you enter the same currency as your from - currency, you will receive an error.
Enter From Date and To Date to span your desired date range.
Enter the Conversion Date and Type. When you use this date and rate type to enter journals, General Ledger automatically displays the rate you define here. If your conversion rate type is assigned to a definition access set, you must have Modify and View privileges to create new rates.
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.
If the profile option is set to No, General Ledger will not enforce the inverse relationship. You can change either of the rates independently.
Enter a rate in the first column that converts your from-currency to your to-currency. This is the rate that you multiply your from-currency amount by to determine the to-currency equivalent. For example, to convert AUD to USD (Australian Dollars to U.S. Dollars), enter .7793 if the rate is .7793 U.S. dollars per Australian dollar.
Enter a rate in the second column that converts your to-currency to your from-currency. This is the rate that you multiply your to-currency amount by to determine the from-currency equivalent. For example, to convert USD to AUD (U.S. Dollars to Australian Dollars), enter 1.2832 if the rate is 1.2832 Australian dollars per U.S. dollar.
Note: If you have the profile option Journals: Display Inverse Rate set to Yes, General Ledger will display inverse exchange rates in the Enter Journals and other windows. For example, assume that the profile option is set to Yes and your ledger currency is USD. If you enter the AUD to USD rate as .7793 in the Daily Rates window, General Ledger will display the inverse rate, or 1.2832, in the Enter Journals window when you create a foreign currency journal using AUD as the foreign currency.
Note: If you run a query on a single rate that contains a range of dates, your query results list each date within your specified date range as a single row.