Reporting currency in Navision & BC 365

Reporting currency in Navision & BC 365

In Business central 365, the values can be recorded in local currency as well as in reporting currency. In multinational business, we generally need to maintain the transactions in local currency as well as in HO currency also. Suppose, an MNC has business in India, UAE, and the USA, in this case, the transactions related to respective countries need to maintain in INR, AED, and USD, whereas the reporting currency needs to maintain in USD only.

BC 365 has provision for this, in General Ledger setup user can do the setup related to local currency as well as reporting currency. For better understanding, I have taken the screenshot from BC 365 General Ledger setup which s as follow:-

As highlighted, we have LCY (Local Currency) as well as Additional Reporting Currency in General Ledger setup. As per the example given above, the system can maintain transactions in local currency and can convert the same in Additional currency for reporting purposes to HO.

How Additional Reporting Currency works

To convert the transactions into reporting currency, the system uses the currency exchange setup. In the currency table, the system has an exchange rate to convert local currency into foreign currency i.e. suppose our local currency is AED but sometimes we do payment or receive payment in Euro also than to keep the transactions in one currency, system convert the EURO transactions into AED, so that the Chart of Account (Balance sheet and Income Statement) will have all figures in one currency whereas some of the transactions have done other than AED.

Whereas, in case of additional reporting currency, the system converts all the truncations into HO reporting currency which is ‘USD’ in our case. For, conversion, it takes the exchange rate from currency setup itself.

Currency Setup

In currency setup, we have two exchange rates “Relational Exch Rate” and “Relational Adjmt Exch Rate”. For reporting currency conversion, the system does the calculation based on “Relational Adjmt Exch Rate”

Figures in Chart of Accounts

Once the reporting currency has set up and system have converted the local currency values in reporting currency, the same gets reflects on the chart of accounts under the below columns.

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