Gravity Foreign Currency Implementation

Gravity supports foreign currencies throughout the application and has integration to the Open Exchange Rates service (https://openexchangerates.org) for providing daily FX rates. In the General Ledger Gravity has the following Currency Structure:

In the Gravity subledgers (Revenue/Expenses/Investments) we maintain the following currencies:

Gravities Inventory is maintained in the entities’ home currency only.

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.

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.

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 Accounts will be reconciled in their declared currency. A CAD bank account will be reconciled in CAD.

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:

Note: Fields that are listed as XXXXX (Base) are created by Microsoft and ignored by Gravity.

Import Example:

Paramaters

Journal Entry Header Record

Journal Lines

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 -