Currency Conversion with accounting currency and reporting currency

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Posted on by Kuhn

I have a customer with a configuration in "General Ledger" "Ledger" in accounting currency "EUR" and reporting currency "EUR".

Now the customer has the following tranaction:

- credit card in USD

- incoming invoice in EUR

The conversion with the parralel currency as installed in Microsoft Dynamics 365 for Finance and Operations Version 8.1 (Oktober 2018) creates conversion amounts which I cannot understand. It seems that the clearing of the open items is based on USD and the conversion will be executed for the accounting currency and reporting currency so I have 2 conversion transactions. Worst of it is that the open items will not be settled completely!

Who can help? Microsoft has no solution.

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Answers (1)

Ludwig Reinhard Microsoft Employee on at

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RE: Currency Conversion with accounting currency and reporting currency

Hello Ann-Kathrin,

Great to hear :-)

I have a last request for this thread: Please be so kind and mark the verified answers to let also other community members know what helped and how to resolve similar issues.

Many thanks for your support.

Best regards,

Ludwig
Ann-Kathrin 35 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi Ludwig,

I apologize for the late response. Yes, I guess the issue is resolved.

Thank you all for your support!

Best regards,

Ann-Kathrin
Ludwig Reinhard Microsoft Employee on at

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RE: Currency Conversion with accounting currency and reporting currency

Hello Ann-Kathrin,

I see.

Is the issue resolved then or do you still need some input/help?

Best regards,

Ludwig
Ann-Kathrin 35 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi Ludwig,

I am sorry.. as I mentioned in the last post.. due to some new imports, the amounts differ from my first post.

The calculations I made in my last post where with an exchange rate for 1st October 2019 around 0,91... EUR for 1 USD.

(unfortunately, I cannot access the system, so I can't tell you the exact rate,now)

And as the settle remainder is just posting with the actual date (in this case, 17.01.2020) there were also an additonal posting because of the correction for the exchange rate from 17.1.2020.

Kind regards,

Ann-Kathrin
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Ludwig Reinhard Microsoft Employee on at

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RE: Currency Conversion with accounting currency and reporting currency

Good Morning Ann-Kathrin,

I made the following calculations, which explain the amounts that you see in the settlement screen that you shared further above.

What I cannot really follow up are the calculations that you made in your last post.

You mentioned that 263.66 EUR equals 287.10 USD with the exchange rate 1st oct 2019.

How did you calculate that?

If I take your exchange rate that was valid from 21 Aug till 21 Oct then I get a USD amount of 292.03.

Can you explain what exchange rate you used for making this conversion and why?

Many thanks,

Ludwig
Ann-Kathrin 35 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi everyone,

after several testings and calculations with the different exchange rates, I think, I understand, what the system is doing.. (still, corrections are welcome ;D )

the short answer: because of the many tests and calculations, I have done, I am nearly sure, that the system won't post the remaining balance in USD, because the system doesn't know, if it's an exchange rate loss/win or if it's just underpayment..

in long (attention: I saw, the amount differs from my first post in this thread, due to different exchange rates after the last import to the test system):
As origin amount, the system checks the USD amount (because it is a vendor with USD currency, after all..) and because of the different exchange rates for different dates, the USD difference with calculated exchange rate from 19.06.2019 is about 7,90 USD. I.e. the original invoice with 295 USD is 7,90 USD less balanced.

Invoice 1, 19.06.2019

295,- USD transaction currency,
263,70 EUR (accounting currency)

Invoice (credit note) 2: 01.10.2019

263,66 EUR transaction currency
263,66 EUR accounting currency

calculations while settling this transactions (settlement date, latest date):

263,66 Euro --> 287,10 USD (exchange rate from 01.10.2019)
295 USD - 287,10 USD = 7,90 USD open balance on Invoice 1

in addition:

287,10 USD --> 256,64 EUR (exchange rate from 19.06.)

---> this results in difference between Invoice 2 and EUR - settled amount: 256,64 EUR - 263,66 EUR= 7,02 EUR

Thank you again, for the suggestion with Settle Remainder. This is, I think, working fine, if the customer wants an automated posting of the remaining amount to a specific account without generating a general journal entry after the setllement..
So the 7,90 USD remaining balance was settled, too. In addition, there were also the remaining postings for exchange rate loss

These were our test postings so far..

Kind regards,
Ann-Kathrin
Ann-Kathrin 35 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi Ludwig,

exchange rates were as followed:

19.06.2019:
0.8938946992044337 EUR for 1 USD

21.08.2019:
0.9028530155290719 EUR for 1 USD

21.10.2019:
0.8973438621679828 EUR for 1 USD

The exchange rates were not overwritten when posting one of these transactions.
As the vendor does have USD as default currency, the currency field was changed to EUR when generating the EUR payment (credit note).

Kind regards,
Ann-Kathrin
Ludwig Reinhard Microsoft Employee on at

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RE: Currency Conversion with accounting currency and reporting currency

Hello Ann-Kathrin,

Can you share the EUR-USD exchange rates that were valid on 19 june and 1 Oct?

Did somebody overwrite the rates when posting the invoice or payment or were the default exchange rates from the exchange rate table used to post the transactions?

Best regards,

Ludwig
Ann-Kathrin 35 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi André,

thank you for your answer.

I set up max. penny differences to 0,50 and max. overpayment or underpayment also to 0,50 in the accounts payable parameters, but the outcome was the same.

I will take a look at the settle remainder functionality and come back to you.
Verified answer

André Arnaud de Cal... 291,280 Super User 2024 Season 2 on at

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RE: Currency Conversion with accounting currency and reporting currency

Hi Ann-Kathrin, Kuhn,

There is a difference in currencies used and also there is a remaining balance of 0,04. Do you have any settings on the AR parameters for over/under payments? Have also a look at the Settle remainder feature: docs.microsoft.com/.../settle-remainder