Configuration of Rate Types and Rates: General Information

In MYOB Advanced, a rate type includes exchange rates for a particular currency pair or multiple currency pairs.

You can update the exchange rates of foreign currencies for the base currency or any other foreign currency on daily basis. You can configure any required currency in the system, and enter effective rates for the currencies on any selected date. You can also view the rates that were effective on a specific date, as well as review the rate history for any required currency pair.

Also, in MYOB Advanced, you can configure different settings for a particular currency pair that can be used in operations with different vendors or customers, as well as in revaluations and translations. To do this, you create rate types. For each rate type, you can specify currency rates and define how long they are effective in the system. You can create any number of rate types. For a particular rate type, you can turn on the online currency rate synchronization functionality to refresh the currency rates by using the Open Exchange Rates API online service.

This chapter provides information on configuring and maintaining the currency rates and rate types in MYOB Advanced.

Learning Objectives

In this chapter, you will learn how to do the following:

  • Create currency rate types
  • Manually configure currency rates for foreign currencies
  • Configure rates for a foreign currency by using the rate synchronization functionality

Applicable Scenarios

You configure currency rates in the system in the following cases:

  • You want to have multiple custom currency rate types in addition to the default rate type. For example, you can use one rate type in bills and invoices, another rate type for bank account revaluations, and yet another rate type for translations of financial statements.
  • You want to use a separate rate type to be assigned to particular customers or vendors; this rate type will be used in documents created for these customers and vendors.

System Default Rate Type

The system automatically creates the default SPOT currency rate type when you specify the base currency on the Companies (CS101500) form. The SPOT currency rate is the current rate of exchange between two currencies (that is, the rate at which the currencies can be exchanged immediately). Although delivery is theoretically immediate, the conventions of currency markets allow for up to two days for the settlement of a transaction.

Creation of Custom Rate Types

You configure rate types on the Currency Rate Types (CM201000) form. For each rate type, you specify the following settings:

  • The identifier of the currency rate type (in the Rate Type ID column).
  • A description of the currency rate type (in the Description column).
  • If the currency rate type is effective for a particular number of days, the number of days that it is effective (in the Days Effective column), starting on the effective date that is specified for each currency rate.

    By default, 0 is specified as the number of effective days. The currency rate is effective until a more recent rate for the same currency and rate type becomes effective.

  • An indicator of whether the currency rate can be updated by using the Open Exchange Rates API currency rate update service (the Refresh Online check box).

    For details, see Configuration of Rate Types and Rates: Ability to Refresh Rates.

  • Optional: The rate adjustment percent to be applied to the rates returned by the online currency rate update service (in the Online Rate Adjustment (%) column).

    For example, suppose that you set this value to 0.05 and the actual currency rate is 1.101234. The system would determine the rate as follows: 1.101234 * (1 + 0.0005) = 1.10178462.

Once you have defined the needed currency rate types, you assign an appropriate rate type to each currency rate that you create on the Currency Rates (CM301000) form.

General Guidelines for Defining Currency Rates

In MYOB Advanced, the following guidelines are applied to currency rates:

  • For a pair of currencies, you must define the rates in both directions. That is, if you have specified the currency rate to translate Currency 1 to Currency 2, this rule is not applied when Currency 2 is translated to Currency 1. For example, if you have an effective EUR-to-USD rate, the translation from USD to EUR could not use it. You have to explicitly define the USD-to-EUR rate on the Currency Rates (CM301000) form.
  • To set up different exchange rates that can be used in the same date range for the same currency pair, you need to create different rate types on the Currency Rate Types (CM201000) form. You then can select different rate types for the same currency pair and specify different exchange rates on the Currency Rates form.

Selection of the Conversion Operation

When you define a currency rate on the Currency Rate Entry tab of the Currency Rates (CM301000) form, you need to select an operation in the Mult./Div. column. The selected operation (Multiply or Divide) is performed on the number of units of the From Currency, by using the currency rate, to convert it to the number of units in the To Currency specified in the Summary area.

For example, suppose that by using a currency rate defined on this form, you are converting the euro (EUR) to the U.S. dollar (USD); USD is thus selected as the To Currency. In the row with a From Currency of EUR, you have specified Multiply in the Mult./Div. column and 1.1 in the Currency Rate column. Then the conversion rule from EUR to USD is x EUR * 1.1 = y USD (for instance, 5 EUR * 1.1 = 5.5 USD). If you have specified Divide in the Mult/Div column and 0.9 in the Currency Rate column, the conversion rule from EUR to USD is x EUR / 0.9 = y USD (for instance, 5 EUR / 0.9 = 5.56 USD).