Gravity Foreign Currency Implementation

fx overview gravity supports foreign currencies throughout the application and has integration to the open exchange rates service ( https //openexchangerates org https //openexchangerates org ) for providing daily fx rates in the general ledger gravity has the following currency structure functional currency – the currency the transaction took place in (functional debit/credit) home currency – the entities natural currency for managing transactions (debit/credit) organizational currency the currency used for consolidations of multiple entities this currency is also known as the database currency (debit orbase/credit orbase) in the gravity subledgers (revenue/expenses/investments) we maintain the following currencies functional currency – the currency the transaction took place in home currency – the entities natural currency for managing transactions gravities inventory is maintained in the entities’ home currency only fx rates an d translations gravity maintains the exchange rates in the currency exchange rate table found in the system settings area this table can be automatically updated using the open exchange rate service or manually updated the appropriate exchange rate will be applied to a new transaction based on the transaction’s apply date and the most recent exchange rate record based on its effective date that is before the apply date on transactions the exchange rate can be manually overridden to match a rate used by an outside agency or financial institution gains and losses from fx fluctuations realized gains or losses are automatically calculated and recorded in the general ledger when transactions are settled for example, a €100 voucher with a 1 2 fx rate to usd will generate a $20 gain when a payment is made with an fx rate of 1 4 unrealized gains and losses are based on unsettled transaction at the end of the period and the fx rate has changed from the posting of the transaction to the end of the period unrealized gains and losses are available in a report that can be run by currency at the end of the period users can elect to record or not record the unrealized gain or loss it is usually books as a reversing journal entry as it gets recalculated at the end of the next period t ransaction settlement and bank accounts bank accounts can be declared in the entity’s home currency or in another currency when using an alternative currency, the transaction involving the bank account must be that bank accounts declared currency for example in a usd company a bank account declared in cad can only be used for cad transactions a bank account in the home currency can support transactions in the home currency and other currencies as long as fx rates are available note gravity does not support fx triangulation example in a usd entity, a cad invoice cannot be paid in euros it must be paid in usd or cad depending on the bank account used a bank account in the home currency can support transactions in other currencies if only one currency is applied to a transaction batch select check payment batches must have vouchers with the same currency example in a usd entity as select check batch can be created for cad payments, but the batch can only contain cad vouchers bank reconciliations bank accounts will be reconciled in their declared currency a cad bank account will be reconciled in cad i mporting gl history with multiple currencies when importing general ledger journal history, it is important to manage the transactions currencies and fx rates to match the original system to import history with multiple currencies you must use the microsoft platform import where both a je header record and je lines are created separately, zipped together, and imported during the import gravity will calculate the organizational and functional debit and credit values using the gravity exchange rate and functional rates respectively in the journal entry header record these values should not be imported as they will be calculated by gravity key fields during the import journal entry header functional currency currency that the transaction took place in functional rate – fx rate of the functional currency to the entity home currency currency – the home currency of the entity gravity exchange rate – fx rate between the home currency and the organizational currency organizational base currency – this is the currency user for organizational consolidations exchange rate – not used by gravity (this is a microsoft field) journal entry line items debit/credit – this is the entities home currency value values created but not imported debit orbase/credit orbase – these are the values translated into the organizational currency functional debit/functional credit – these are the values translated into the functional currency functional currency – the functional currency of the transaction note fields that are listed as xxxxx (base) are created by microsoft and ignored by gravity import example paramaters entity = enterprise home currency = euro fx = 1 22 organizational currency = usd function currency = pound sterling fx = 2 journal entry header record transaction id entity code entry date apply date journal description functional currency functional rate organizational base currency gravity exchange rate currency 1 enterprise 8/1/2023 8/1/2023 imported je pound sterling 2 us dollar 1 22 euro journal lines journal id entity code destination company account number debit credit 1 enterprise enterprise 4100 0000 50 1 enterprise enterprise 1160 0000 50 gravity limits the functional debit/credit on accounts tied to bank account records to the currency of the bank account record a euro bank account tied to gl account 1200 in a usd entity will force the functional values to account 1200 to be in euros only this is because the functional currency is used in the bank reconciliation and in this example will be performed in euros gravity will calculate the organizational debit/credit and the functional debit/credit from the associated fx rates as shown below imported journal entry lines journal id entity code destination company account number debit credit debit orbase credit orbase functional debit functional credit functional currency je 14843 enterprise enterprise 4100 0000 50 00 61 00 25 00 pound sterling je 14843 enterprise enterprise 1160 0000 50 00 61 00 25 00 pound sterling