The following topics cover the setup of multiple currencies.

Overview
Introduces the Financials three-currency system.

Statutory Currency
Use an additional base currency for reporting purposes.

Rounding Methods
Define methods the system uses to round monetary amounts.

Currencies
Use the Currency activities to create, view, modify, and delete monetary units.

Exchange Rate Types
Add user-defined exchange rate types.

Exchange Rates
Define exchange rates for multiple-currency transactions.

Realized Gain/Loss Accounts
Accounts used for gain or loss postings resulting from multiple-currency transactions.

Purchase Gain/Loss Accounts
Define purchase gain and loss accounts for currencies.

Currency Display
Describes the currency format displayed in reports.

QAD Financials provides a full set of functions to support monetary amounts expressed in one of three currencies:

This three-currency system lets you display a transaction or create a report in any of the defined currencies.

A set of ISO currencies is supplied with the system. The base currency is the currency in which all entities within a domain conduct business. The base currency for a domain is specified in Domain Create and is used for recording all financial transactions within that domain. You can define as many other currency codes as your organization uses. See Currencies.

You can also use a second base currency for reporting purposes. This second currency is known as the statutory currency. See Statutory Currency.

When creating GL accounts, you can specify that the account accepts transactions in all currencies, in the base currency only, or in a specific currency. See GL Account Types for details.

Transaction currencies can be used with purchase orders, sales quotations, sales orders, price lists, AR and AP payments, custom and supplier invoices, journal entries and other GL transactions, and customer service. For accounts that are not denominated in a unique currency, you can record journal entries in either the base currency or in the transaction currency. For accounts denominated in a specific currency, you must enter all amounts using the transaction currency. See Journal Entry.

An exchange rate is the current market price for which one currency can be exchanged for another. It is expressed as the amount by which one unit of a currency must be multiplied to give the equivalent value in the second currency. Exchange rates are used for any transaction that is denominated in a currency other than the base currency of the domain, and for any transaction that is denominated in a currency other than the statutory currency of the domain. Exchange rates can also have a scaling factor. This option is useful for currencies that have a very small value compared to currencies such as the US dollar and Euro.

The Derived Exchange Rate function lets you derive new exchange rates for currency pairings using the exchange rates between the base currency of the current entity and the base currencies of other entities in the same shared set. See Derived Exchange Rates.

Exchange rate differences are automatically calculated during revaluation, and the analysis of realized currency exchange differences is also supported.

Monetary assets and liability accounts defined in foreign currency can be revalued at the current rate, fixed rate, historical rate, statutory rate, or any predefined rate. Individual customer and supplier accounts maintain the historical rate. See Creating GL Accounts for information on setting exchange methods for revaluation.

For customer and supplier revaluation, the revaluation is entered in separate accounts and automatically reversed in the next period. This step is done because the revaluation does not change the value of the open item so that the system can differentiate realized and unrealized currency differences. The system also lets you simulate what-if scenarios.

You can separately revaluate the accounts against base currency and statutory currency, and you can use different revaluation rates for each of the currencies. See Journal Entries and Daybook Security for more information.

Realized exchange differences are automatically calculated and posted when invoices in foreign currency are paid in banking entry or when the status of foreign payments, such as checks and drafts, is set to Paid. These differences are calculated and posted in both base currency and statutory currency.

Rounding methods are used to control how the system rounds monetary amounts for data entry and display. See Rounding Methods.

Since currency formats vary by region, the currency display format is based on the country code. If a regional format is not defined, the system uses the period (.) as a decimal point. The decimal point indicator in financial functions is determined by Windows regional settings on the client computer, and can vary from user to user.

Most reports and screens use the currency format of the logged-in user when displaying monetary values. However, invoices to customers use the format of the recipient address. See Currency Display for details.