Multi-Currency Setup

The first step necessary to proceed with Multi-Currency setup is to define the following:

1. What is the Self-Balancing Entity's Functional (Base) currency? This is typically determined based on the primary currency the company conducts business in. This may be different than your Local currency. You may want to discuss with your Tax Advisor or Auditors.

2. What are the financial reporting requirements? E.g., financial data in local currency is likely required for reporting to the owning tax jurisdiction However; a Parent company may require financial reporting in the Parent currency. Khameleon supports maintaining the Ledger in two currencies (Book 1 – Base and Book 2 – Reporting). Based on the FX rates you decide to maintain, the system will calculate and store the Book 2 value for every transaction that is entered in or interfaced to the GL from the Khameleon Sub-ledgers.

3. What FX rate method do you want to maintain for recording transactions. E.g., Daily rates, Weekly or Monthly Average rate from prior week/month, etc. Khameleon refers to this as Exchange Rate Codes / Types

4. What currencies will you need to maintain FX rates for. Your Book 1 and Book 2 currencies are a given, but you may do business in other currencies. Determine what currency codes you need to setup and maintain. It is advisable to use ISO standard currency codes. You can easily find the standard currency codes on the Internet.

Once you have determined 1 through 4 above, navigate to Accounting > Multi-Currency> Maintenance>Currency Codes. Set up the codes defined in 3 and 4 above. See example screen below.

The Self-Balancing Entities window is accessed by clicking Multi-Currency from the Set Up Companies window (Setup/System Setup/Maintenance/Controls/Setup Companies) and is used to establish Multi-Currency information for the specified entity.

Menu Path: Setup > System Setup > Maintenance > Controls > Set-up Companies [Multi-Currency]

Selecting the ‘Does Entity Conduct Business in Foreign Currencies’ check box in the Self-Balancing Entities window causes the pop-up window shown below to appear during transaction entries in Khameleon (i.e., Journal Entries, AP vouchering, invoicing, etc.).

In order to conduct business in Multi-Currencies, you must click the Multi-Currency button at the bottom of the Self-Balancing Entity Screen to setup Multi-Currency information.

Enter the currency base code for the entity specified in the Base Currency Code (Book 1) list or click for a listing of valid values.

1. Select the Does Entity conduct business in Foreign Currencies? Check box if you wish to access the MC window from transaction windows. For additional information, see “Multi-Currency Pop-up Window.”

2. Select the Allow deletions of Exchange Rates from Table? Check box to allow deletions by supervisors.

3. Enter the account for unrealized net valuation differences in the Exchange Difference Unrealized) Account field.

4. Enter the account for realized net valuation differences in the Exchange Profit/Loss (Realized) Account field.

Note: Account numbers used for net valuation differences are split between unrealized (done by Month End Revaluation Process) and realized at settlement (done when vouchers or AR invoices are paid).

5. Enter the exchange rate type you wish to use as a default for reporting in the Use Exchange Rate Type Code list or click for a listing of valid values.

6. Enter the reporting currency you wish to use for reporting in the Reporting Currency Code (Book 2) list or click for a listing of valid values.

If you enter a currency in the Reporting Currency Code (Book 2) field, Book 2 is always calculated behind the scenes using the MC rates between Book 1 (base currency) and Book 2 (reporting currency). When a report is produced, if the currency code entered is the same as Book 2, the report displays the actual amounts calculated for Book 2. A report for a currency code that is the same as your base currency would produce a Book 1 report as actuals.

Note: Book 2 currency must have a rate relationship established in the Multi-Currency/Maintenance/Currency Code Rates window with each currency reported on in Book 1. Book 2 and Book 1 may not be the same code.

7. Enter the exchange rate type you wish to use for month-end revaluation of reporting currency in the Use Exchange Rate Type Code list or click for a listing of valid values.

8. Enter the account used for month-end revaluation between Book 1 and Book 2 in the Exchange Translation Account field. This allows Book 2’s month-end revaluation differences for Book 2 to be in a different account than the unrealized Book 1 differences.