Exchange rates and the Currency Calculator

Answer ID 9332   |    Published 06/06/2006 05:19 PM   |    Updated 16/12/2013 01:34 PM
How do I work with exchange rates in my software?

This support note is explains how to modify the exchange rate of a foreign currency when using the multicurrency feature in applicable software versions.

Note: Our support note Setting up and troubleshooting multiple currencies may also be useful.


What is multicurrency?

Multicurrency is a feature that allows transactions to be entered in currencies other than the local Australian dollar currency. This means that if you deal in international trade or have a bank account in a foreign currency, you can easily keep track of your transactions. When entering your exchange rates, you can update them in the Currency List or at the transaction level.

Note: The multicurrency feature must be activated via a system preference. Go to the Setup menu and choose Preferences, then click the System tab and select the option I Deal in Multiple Currencies [System-wide]. This preference cannot be deactivated once a foreign currency transaction is recorded.


How do I update an exchange rate?

  1. Go to the Lists menu and choose Currencies.

  2. Highlight the currency you need to update then click Edit.

  3. Change the value in the Exchange Rate field then click OK.

Entering exchange rates at the transaction level

When you enter a Sale or a Purchase, if you choose a customer or supplier that is not local, the Rate button (or Currency button if using an older software version) will display the three letter currency code. By clicking this button you can enter the exchange rate at the transaction level. You also have the opportunity to update the Currency List.

The following means the transaction you are recording will be in Australian Dollars:

Image


 

Whereas this means the transaction you are recording will be in Japanese Yen:

Image


What does the exchange rate represent?

Your software holds the exchange rate value based on what 1 unit of the currency you are dealing in can buy of Australian Dollars.

Example:  If the Australian dollar is currently trading at 0.66 US cents, then the exchange rate that you need to enter into your accounting program is 1.515152.  This is calculated by Aus$1/ US$0.66. This is easily calculated by using the Currency Calculator. 


 

Note: Your software enables the exchange rate to round up to six decimal places.


How do I use the Currency Calculator?

It is important when entering multicurrency transactions that the amount in the local currency and the foreign currency are as accurate as possible. For this reason your software calculates the exchange rate to six decimal places and we suggest you use the Currency Calculator to help do this.

To access the Currency Calculator, go to the Help menu and choose Currency Calculator.


How do I calculate exchange rate values?

In this example, we are finding what the correct exchange rate value is to enter into your currency list.

The exchange rate value shown below tells you that AUD$1 buys US$0.66. What we then need to enter is $1 in the Amount in Local Currency field and $0.66 in the Amount in Foreign Currency field. When you click Calculate next to Exchange Rate, the Currency Calculator calculates the value for you.

 

Image

This tells us that the Exchange Rate that we need to enter into our Currency List is 1.515152.


How do I calculate the local currency

You can calculate the value of Local Currency based on the Exchange rate.

You need to:

  1. Calculate what the exchange rate is as detailed above.

  2. Enter the amount in foreign currency, for example US$500.

  3. Click Calculate next to the Amount in Local Currency field.


    Image


    This tells us that US$500 is equal to AUD$757.58
     

How do I calculate a foreign currency?

You can calculate the value of a foreign currency, by entering the Exchange Rate and the Local Currency.

  1. Calculate the exchange rate as above.

  2. Enter the Amount in Local Currency, for example AUD$500 .

  3. Click Calculate next to the Amount in Foreign Currency field.


    Image


    This tells us that AUD$500 is equal to US$330.




Was this support note helpful?
 
How can we improve the content of this support note? Note: If you need help from the support team, please post on the Community Forum at community.myob.com

Print