Spot Rates

When you set up exchange rates for currency relationships, you must specify whether spot rates are allowed on transactions between the two currencies. To specify whether spot rates are allowed for a currency relationship, you select or clear the Allow Spot Rate check box on the Revise Currency Exchange Rates form.

When you enter a spot rate on an invoice or voucher, the system uses the conversion method (Y or Z) that is stored in the F0015 table; it does not use the default conversion method specified in the General Accounting Constants program (P0000). The system uses the conversion method set up for a specific currency relationship with an effective date that is on or before the general ledger date of the invoice or voucher.

For spot rates, the system compares the converted currency amount with the amount that would be derived using the actual exchange rate. It calculates the difference between the two amounts and validates the entry, based on the tolerance limit specified in the master business function (MBF) processing options for Voucher Entry (P0400047), Invoice Entry (P03B0011), and Journal Entry (P0900049). If the calculated amount is greater or less than the tolerance amount, you receive a warning message.

For example, 5.0 specifies a tolerance limit of 5 percent. If you enter a spot rate that calculates an amount that is 6 percent greater or less than the amount that is derived using the actual exchange rates, you receive a warning. In this way, the system helps to ensure that the spot rate that you enter is reasonable, thus alerting you to possible data entry errors.