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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Understanding Accounti...
Finance | Project Operations, Human Resources, ...
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Understanding Accounting and Reporting Currency Exchange Rates in the Ledger

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Posted on by Olafsonn 36
Hi everyone,
 
I hope you're all doing well and having an amazing day so far! I've got a question regarding accounting and reporting currency exchange rate types in the Ledger. Specifically, I'm curious about how these types are linked with transactions. While I have about two years of experience implementing various legal entities, I often find myself a bit confused with this particular topic.
 
Here's where my confusion lies: Let's say you set the exchange rate from EUR to USD in the reporting exchange rate type. However, when you go to post a transaction, it still prompts you to fill in the EUR to USD exchange rate in the accounting exchange rate type. I'm trying to understand the purpose of the reporting currency exchange rate type and why it is used. Could anyone provide some basic examples or explanations to clarify this for me?
 
I've noticed that for fixed assets, it's a bit different since you specify the reporting exchange rate in the setup. But I'm still grappling with the concept in relation to other transactions. Any insights or explanations would be greatly appreciated.
 
Mikkel
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  • Suggested answer
    BillurSamdancioglu Profile Picture
    BillurSamdancioglu 20,521 Most Valuable Professional on at
    Reporting exchange rate is for only reporting purposes.
    For example; your company has 100 legal entities but headquarter is in USA and even each legal entity reports in their local currency for legal purposes, you can also report in USD when you select USD in reporting currency.
    This data is stored per transactiona llevel. 
    you may manage ib Financial reporter as well but it depends on how you want to see.
  • Rickelkio Profile Picture
    Rickelkio 11 on at
    In accounting, the reporting exchange rate type is used for consistent financial reporting, ensuring accuracy in statements like balance sheets. It sets the conversion for generating reports. On the other hand, the accounting exchange rate type is transaction-specific, determining how individual transactions are recorded in the ledger. Fixed assets often have a simpler setup with reporting exchange rates specified during setup. Must-have items for cats

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