Calculation Methods

When you set up exchange rates for currency relationships, you must specify one of these calculation methods:

• Inverse method

• No inverse method

• Triangulation method

You can change calculation methods for a currency relationship at any time by specifying the date on which you want the new method and exchange rate to be effective. This flexibility enables you to change a specific currency relationship from inverse to no inverse, and vice versa, or to start or stop using triangulation for a currency relationship. If you change the calculation method for a currency relationship, you are still able to reference historical rates and methods.

Along with the calculation method, you also specify a conversion method for each currency relationship. You set up the default conversion method in the General Accounting Constants program. You can accept or override the default conversion method when you set up a currency relationship using the Currency Exchange Rate Entry program (P0015A). The system stores the conversion method for each currency relationship in the F0015 table and it uses that conversion method for currency calculations; it does not use the default conversion method specified in the General Accounting Constants program.