Overview: The Multiple Reporting Currencies (MRC)
feature allows you to report and maintain accounting records at the
transaction level, in more than one functional currency. You do this by
defining one or more reporting sets of books, in addition to your
primary set of books. In your reporting sets of books, you maintain
records in a functional currency other than your primary functional
currency. You can set up multiple reporting sets of books and associate
them with a primary set of books.
Your primary functional currency is the currency you use to record transactions and maintain your accounting data within Oracle Applications. The functional currency is generally the currency in which you transact most of your business and the one you use for legal reporting.
A reporting functional currency is a currency other than your primary functional currency for which you need to report accounting data. You must define a set of books for each of your reporting functional currencies.
When you enter transactions in Oracle Applications, they are converted, as needed, into your primary functional currency and each of your reporting functional currencies. You log into a reporting responsibility to inquire and report on transactions and account balances in your reporting functional currencies.
Oracle Applications Support for MRCThe following Oracle Applications support Multiple Reporting Currencies:
· General Ledger
· Payables
· Purchasing
· Receivables
· Cash Management
· Projects
· Assets
· Cost Management
[Cost Management amounts are converted to a specified reporting currency when you request a report. The converted amounts, however, are not stored in the Cost Management subledger. ]
When to Use MRC: MRC is specifically intended for use by organizations that must regularly and routinely report their transactions and financial results in multiple currencies, other than their primary functional currency. If you only need to report balances in a currency other than your primary functional currency, the General Ledger Translation feature is probably sufficient.
* MRC is not intended as a replacement for General Ledger's translation feature.
Typically, you should consider using MRC when:
1) You operate in a country whose unstable currency makes it unsuitable for managing your business. As a result, you need to manage your business in a more stable currency and still be able to report your transactions and account balances in the unstable local currency.
2) Your company is multinational, and you need to report financial information in a common functional currency other than that of the transaction or your primary functional currency.
3) You operate in a country that is part of the European Monetary Union (EMU), and you want to concurrently report in Euro in preparation for the pan-European currency.
MRC Features
1- Reporting Sets of Books: In Oracle Applications you record day-to-day business transactions in your organization's primary set of books or post transactions to the primary set of books from your subledgers. From the primary set of books, you can report your account balances in your primary functional currency.
To use MRC, you must define additional sets of books, called reporting sets of books, and associate them with a primary set of books. When defining a reporting set of books, you specify your reporting functional currency as the set of book's functional currency. This is the currency in which you want to inquire and report your transactions and account balances.
For example, assume your business is located in Canada. You use a primary set of books whose functional currency is Canadian Dollars (CAD), but you also need to inquire and report on your transactions and balances in U.S. Dollars (USD), since this is the functional currency of your parent organization. You define a reporting set of books with a functional currency of USD, then you associate this reporting set of books with your primary set of books.
[The full range of General Ledger functionality is available from a reporting set of books. You can post journals, revalue and translate balances, perform consolidations, query account balances, submit standard General Ledger reports, and define custom financial reports.]
2- Transaction-Level Conversion: When you enter transactions in Oracle Applications that support MRC, they are converted, as needed, into your primary functional currency and each of your reporting functional currencies, as follows:
Primary functional currency transactions: All transactions denominated in your primary functional currency are recorded in this currency. The transactions are also converted automatically to each of your reporting functional currencies.
Foreign currency transactions: Transactions denominated in a foreign currency are converted automatically to your primary set of books' functional currency and to each of your reporting functional currencies.
3- Subledger Transactions: When you enter transactions into the subledgers of Oracle Applications that support MRC, the transactions are converted to your reporting functional currencies at the time of original entry. The primary functional currency amounts and their associated reporting currency amounts are stored together in your subledgers. You must post subledger transactions to General Ledger in both the primary set of books and in each reporting set of books.
Since conversion occurs when the transactions are entered, your reporting currency amounts are always synchronized with your primary currency amounts.
4- General Ledger Journals: Journal entries that originate in General Ledger, such as manual journals, recurring journals, and MassAllocations, as well as journals that you import from sources other than Oracle Applications' subledgers, are converted to your reporting functional currencies when you post the journals in General Ledger in your primary set of books.
The converted journals are then copied from your primary set of books to each of the associated reporting sets of books. The converted journals must be posted separately in each reporting set of books.
The balances in your reporting sets of books will not be synchronized with the balances in the associated primary set of books until you:
- Post your subledger transactions to General Ledger from both your primary and associated reporting sets of books
- Post all journals in your primary set of books
- Post the converted journals in each of the associated reporting sets of books
Inquiry and Reporting in Multiple Currencies
Oracle Subledgers: When you enter transactions into the subledgers of Oracle Applications that support MRC, the transactions are converted to your reporting functional currencies at the time of original entry. As a result, your reporting currency information is immediately available for inquiry and reporting in the subledgers. Each inquiry or report that normally displays information in the primary functional currency can also be displayed in any of the associated reporting currencies. To do so, you log into a reporting responsibility, then view and report transactions in the reporting currencies associated with that responsibility.
You must post subledger transactions to General Ledger in both the primary set of books and in each reporting set of books. After you have posted the transactions, you can log into a General Ledger reporting responsibility, post the newly created journals, then report on the journals and the account balances of the associated reporting set of books.
Oracle General Ledger: For General Ledger journals, you must complete the posting process in both your primary set of books and each associated reporting set of books before you can report on the updated balances. Note that separate balances are updated for each set of books.
Before you can report on your updated balances, you must also post your subledger transactions to General Ledger from both your primary and associated reporting sets of books, and post the newly created journals in both your primary and associated reporting sets of books.
Each General Ledger report or inquiry that normally displays information in the primary functional currency can also be displayed in any of the associated reporting currencies. To inquire or report on the account balances of a reporting set of books, you log into the associated General Ledger reporting responsibility.
When you inquire on account balances in a reporting set of books, you can drill down to the subledger details (in your reporting functional currency) using General Ledger's standard drilldown features.
For reconciliation purposes, you can use the Financial Statement Generator (FSG) to create a custom comparison report that lists balances from your primary and reporting sets of books in separate columns. Use this report as the basis for reconciling your primary and reporting sets of books.
Euro Support: MRC allows Oracle Applications to support organizations that are transitioning from their national currency to the Euro:
Transition Period: If you currently use Oracle Applications, you can continue to maintain your current set of books in your national currency and use MRC to begin reporting transactions and financial results in the Euro. If you are implementing Oracle Applications for the first time, you can set up your primary set of books using Euro as the functional currency and use MRC to report transactions and financial results in your national currency.
Currency Conversion: MRC observes the fixed-rate relationships you defined between the Euro and EMU currencies, as well as the effective starting dates of those relationships, when converting transaction amounts to or from the Euro or EMU currencies. When converting amounts from your primary functional currency to your reporting functional currencies, MRC fully complies with the conversion guidelines established by the European Commission.
Setting Up MRCThe following table provides a summary of the steps you must follow to set up MRC in your applications. These steps are described in more detail in the next section.
Note: You must install MRC before you can begin the setup steps in this section. See: Oracle Applications Installation Manual for information about installing MRC.
Step Description
Step 1 Enable or define primary set of books :Set of Books window(General Ledger)
Step 2 Enable and/or define reporting currencies :Currencies window(General Ledger)
Step 3 Define reporting sets of books :Set of Books window(General Ledger)
Step 4 Assign reporting sets of books to primary set of books: Assign Reporting Sets of Books window(General Ledger)
Step 5 Define conversion options for each application: Conversion Options window(General Ledger)
Step 6 Define General Ledger conversion rules: GL Conversion Rules window(General Ledger) Step 7 Define reporting responsibilities : Responsibilities window(System Administrator)
Step 8 Assign reporting sets of books to reporting responsibilities : System Profile Values window (System Administrator)
* Daily rates are used to convert your primary set of book's transactions to the appropriate reporting currencies. If you do not currently maintain daily rates, you must do so when you implement MRC.
Step 1 - Enable or Define Primary Set of BooksIf you currently use Oracle Applications, you must enable your set of books as the MRC primary set of books. If you are installing Oracle Applications for the first time, you must define your primary set of books.
Note: Your primary set of books is where you record your day-to-day business transactions in Oracle Applications. The primary set of books uses a specific chart of accounts, accounting calendar, and functional currency. For MRC purposes, the functional currency is always the primary functional currency.
For each set of books you use with MRC, you need to specify whether it is a primary or reporting set of books. This is done on the Set of Books window, using the Reporting Currency Options alternative region.
Step 2 - Enable and/or Define Reporting Currencies
To use MRC, you may need to enable and/or define additional currencies if the currency you want to use for a reporting set of books is not already enabled or does not appear in the list of predefined currencies. In addition, you need to enable and/or define any currencies you expect to use to enter transactions.
Primary Functional Currency: the currency you use to record transactions and maintain your accounting data within Oracle Applications. The primary functional currency is generally the currency in which you transact most of your business and the one you use for legal reporting.
Reporting Functional Currency: a currency other than your primary functional currency for which you need to report accounting data. For example, as of January 1, 1999, the new pan-European currency, the Euro, will become effective. If you need to report in the Euro currency, you will need a reporting set of books with the Euro as the functional currency. Therefore, you need to enable the EUR currency.
Transaction Currency: the currency in which a transaction originates. For example, if you are a Canadian organization and you trade with organizations located in Japan, you must enable the Japanese Yen if you will be issuing purchase orders, generating invoices, paying bills, and receiving payments in Yen.
Step 3 - Define Reporting Sets of Books
To use MRC, you must define reporting sets of books and associate them with your primary set of books.
A reporting set of books is a financial reporting entity that is associated with a primary set of books. The reporting set of books has the same chart of accounts and accounting calendar as the primary set of books, but usually has a different functional currency.
For example, assume that your company headquarters is located in Australia and that its primary functional currency is Australian Dollars (AUD). Assume also that you have one subsidiary each in Canada and Germany, both of which maintain a primary set of books in its local functional currency -- Canadian Dollars (CAD) for the Canadian subsidiary and Deutsche Marks (DEM) or the Euro (EUR) for the German subsidiary. Each subsidiary should maintain a reporting set of books in AUD, so it can analyze and report transactions using the parent's functional currency.
For each reporting set of books you define, you need to specify it as a reporting set of books on the Set of Books window, using the Reporting Currency Options alternative region.
Other Considerations:
1- If your primary set of books is defined as an average balances consolidation set of books, any associated reporting sets of books must also be defined as average balances consolidation sets of books.
2- If you use combined basis accounting with Oracle Payables, you will have two Payables sets of books (primary and secondary). One will be for accrual basis accounting and the other will be for cash basis accounting. If you want to report Payables transactions in your reporting currencies for each accounting basis, you must define a reporting set of books for each.
Other Set of Books OptionsSome set of books options, such as the chart of accounts and accounting calendar, must be the same in both your primary and reporting sets of books. For other set of books options, we specifically recommend or do not recommend that they be the same in both your primary and reporting sets of books. For still other set of books options, you set them in each reporting set of books depending on what features you want available in that reporting set of books.
Set of Books Options - Recommended Setting in Reporting Sets of Books1- Functional Currency - Different from primary set of books unless you have a specific reason for using the same functional currency in both sets of books (see Note below)
2- Allow Suspense Reporting - Same as primary set of books.
3- Balance Intercompany Journals - Same as primary set of books.
4- Enable Average Balances - Same as primary set of books only if you want to inquire and report average balance transactions in your reporting currency.
5- Enable Journal Approval - Same as primary set of books only if you want journals created directly in your reporting set of books to be processed through your organization's approval hierarchy.
6- Enable Journal Entry Tax - Same as primary set of books. If it is not the same, you will not be able to view tax details when you inquire on journals in your reporting set of books.
7- Accounts - Same as primary set of books.
8- Average Balance Options: Consolidation Set of Books - Must be the same as primary set of books.
9- Enable Budgetary Control - You cannot enable for reporting sets of books.
10- Require Budget Journals - Same as primary set of books if you want to require that budget journals be used to enter budget amounts in your reporting set of books.
[ In some circumstances, you may want to use the same functional currency for both your primary and reporting sets of books. For example, for financial or currency management. You can apply different revaluation options in the primary and reporting sets of books, providing different financial information for each set of books.]
Step 4 - Assign Reporting Sets of Books to Primary Set of Books: Use the Assign Reporting Sets of Books window to assign each reporting set of books to its related primary set of books. Note the following rules:
1- You can assign up to eight reporting sets of books to a single primary set of books. Most organizations will find no need to assign more than three.
Caution: If you need to assign more than three reporting sets of books to a primary set of books, be aware that each additional assignment will have an incremental impact on your system's performance and disk space consumption.
2- You can assign the same reporting set of books to more than one primary set of books, provided they all have the same calendar and chart of accounts. You might want to do this if you need to consolidate transactions from multiple primary sets of books (with the same or different functional currencies) into the same reporting currency.
3- You cannot assign a primary set of books to another primary set of books, or to a reporting set of books.
4- If you use combined basis accounting in Oracle Payables, you only need to assign the related reporting set of books to your Payables primary set of books in this step. The relationship for the Payables secondary set of books will be made in the next step when you define the Payables conversion options.
To assign a reporting set of books to a primary set of books:1. Navigate to the Assign Reporting Set of Books window.
2. Select your primary set of books from the list of values. The set of books' functional Currency, Chart of Accounts, and accounting Calendar will be displayed.
Note: Only those sets of books that have been defined as a primary set of books will be included in the list of values.
3. From the list of values in the Reporting Set of Books region, select the reporting set of books that you want to assign to the primary set of books. The reporting set of books' functional currency will be displayed.
Only those sets of books that have been defined as a reporting set of books will be included in the list of values.
4. Choose the Conversion Options button to define conversion options for each combination of Oracle Application and operating unit for which you want to convert transactions to your reporting functional currency for this reporting set of books.
5. Save your work.
6. Repeat the previous three steps for each reporting set of books you want to assign to the primary set of books.
Step 5 - Define Conversion Options for Each Application For each reporting set of books assignment you make, you must define conversion options for each combination of Oracle Application and operating unit for which you want to convert transactions to your reporting functional currencies. You can set conversion options for these applications:
· General Ledger
· Assets
· Payables
· Receivables
· Projects
· Purchasing
When you use Oracle Applications' Multiple Organizations feature with Payables, Receivables, Purchasing, or Projects, you need to define your MRC conversion options at the operating unit level.
For Assets, you define conversion options at the Asset Book level. For General Ledger, you define conversion options at the application level only.
Conversion options you can set include the reporting conversion type, the action to take when a conversion rate cannot be found, and the range of effective dates for which transactions should be converted to reporting currencies. Also, you need to set some application specific options, such as
Oracle Assets: specify the Asset Book (depreciation book).
Oracle Payables: optionally specify the AP Reporting Secondary Book if you use combined basis accounting.
General Ledger: specify GL Conversion Rules, which control journal conversion at the journal source and category level.
To assign conversion options to Oracle Applications:1. From the Assign Reporting Set of Books window, choose the Conversion Options button. The Conversion Options window will appear, displaying your primary and reporting set of books information.
2. Select Operating Units/Books from the poplist.
3. In the region below the poplist, select the application for which you want to define conversion options.
4. Enter your operating units/books information.
5. Choose Conversion Options from the poplist. The Conversion Options alternative region will appear.
6. Enter your conversion options.
7. Save your work.
Operating Units/Books Information:
1- Operating Unit: For Payables, Receivables, Purchasing, or Projects, specify the operating unit for which your conversion options apply. This allows you to define different conversion options for each operating unit. Also, if you don't want an operating unit's transactions converted to your reporting currencies, you can choose to omit that operating unit when you define the conversion options for the related application.
2- Asset Book: For Assets, specify the asset depreciation book for which your conversion options apply. The asset depreciation book can be either a corporate book or a tax book. You can associate multiple asset depreciation books to a reporting set of books.
The asset depreciation book you specify must be linked to your primary set of books.
AP Reporting Secondary Book: For Payables, enter the AP Reporting Secondary Book if you use combined basis accounting and want your Payables secondary set of books transactions to be converted to your reporting currencies.
Conversion Options
1- Reporting Conversion Type: The conversion rate type MRC uses to retrieve exchange rates for converting transactions to your reporting currency. This differs from the conversion rate type you specify when you enter a transaction. Oracle Applications use the transaction conversion rate type to retrieve exchange rates for converting entered amounts from the transaction currency to your primary functional currency (alternatively, you can specify your own rate).
- You must enter a Reporting Conversion Type when defining conversion options for your subledger applications, such as Payables and Receivables.
- For General Ledger, the reporting conversion type is set for specific combinations of journal source/category on the GL Conversion Rules window.
- For the reporting conversion type, you can specify your own conversion rate type or choose one of the predefined rate types. To specify your own, you must first define it in General Ledger.
Your primary functional currency is the currency you use to record transactions and maintain your accounting data within Oracle Applications. The functional currency is generally the currency in which you transact most of your business and the one you use for legal reporting.
A reporting functional currency is a currency other than your primary functional currency for which you need to report accounting data. You must define a set of books for each of your reporting functional currencies.
When you enter transactions in Oracle Applications, they are converted, as needed, into your primary functional currency and each of your reporting functional currencies. You log into a reporting responsibility to inquire and report on transactions and account balances in your reporting functional currencies.
Oracle Applications Support for MRCThe following Oracle Applications support Multiple Reporting Currencies:
· General Ledger
· Payables
· Purchasing
· Receivables
· Cash Management
· Projects
· Assets
· Cost Management
[Cost Management amounts are converted to a specified reporting currency when you request a report. The converted amounts, however, are not stored in the Cost Management subledger. ]
When to Use MRC: MRC is specifically intended for use by organizations that must regularly and routinely report their transactions and financial results in multiple currencies, other than their primary functional currency. If you only need to report balances in a currency other than your primary functional currency, the General Ledger Translation feature is probably sufficient.
* MRC is not intended as a replacement for General Ledger's translation feature.
Typically, you should consider using MRC when:
1) You operate in a country whose unstable currency makes it unsuitable for managing your business. As a result, you need to manage your business in a more stable currency and still be able to report your transactions and account balances in the unstable local currency.
2) Your company is multinational, and you need to report financial information in a common functional currency other than that of the transaction or your primary functional currency.
3) You operate in a country that is part of the European Monetary Union (EMU), and you want to concurrently report in Euro in preparation for the pan-European currency.
MRC Features
1- Reporting Sets of Books: In Oracle Applications you record day-to-day business transactions in your organization's primary set of books or post transactions to the primary set of books from your subledgers. From the primary set of books, you can report your account balances in your primary functional currency.
To use MRC, you must define additional sets of books, called reporting sets of books, and associate them with a primary set of books. When defining a reporting set of books, you specify your reporting functional currency as the set of book's functional currency. This is the currency in which you want to inquire and report your transactions and account balances.
For example, assume your business is located in Canada. You use a primary set of books whose functional currency is Canadian Dollars (CAD), but you also need to inquire and report on your transactions and balances in U.S. Dollars (USD), since this is the functional currency of your parent organization. You define a reporting set of books with a functional currency of USD, then you associate this reporting set of books with your primary set of books.
[The full range of General Ledger functionality is available from a reporting set of books. You can post journals, revalue and translate balances, perform consolidations, query account balances, submit standard General Ledger reports, and define custom financial reports.]
2- Transaction-Level Conversion: When you enter transactions in Oracle Applications that support MRC, they are converted, as needed, into your primary functional currency and each of your reporting functional currencies, as follows:
Primary functional currency transactions: All transactions denominated in your primary functional currency are recorded in this currency. The transactions are also converted automatically to each of your reporting functional currencies.
Foreign currency transactions: Transactions denominated in a foreign currency are converted automatically to your primary set of books' functional currency and to each of your reporting functional currencies.
3- Subledger Transactions: When you enter transactions into the subledgers of Oracle Applications that support MRC, the transactions are converted to your reporting functional currencies at the time of original entry. The primary functional currency amounts and their associated reporting currency amounts are stored together in your subledgers. You must post subledger transactions to General Ledger in both the primary set of books and in each reporting set of books.
Since conversion occurs when the transactions are entered, your reporting currency amounts are always synchronized with your primary currency amounts.
4- General Ledger Journals: Journal entries that originate in General Ledger, such as manual journals, recurring journals, and MassAllocations, as well as journals that you import from sources other than Oracle Applications' subledgers, are converted to your reporting functional currencies when you post the journals in General Ledger in your primary set of books.
The converted journals are then copied from your primary set of books to each of the associated reporting sets of books. The converted journals must be posted separately in each reporting set of books.
The balances in your reporting sets of books will not be synchronized with the balances in the associated primary set of books until you:
- Post your subledger transactions to General Ledger from both your primary and associated reporting sets of books
- Post all journals in your primary set of books
- Post the converted journals in each of the associated reporting sets of books
Inquiry and Reporting in Multiple Currencies
Oracle Subledgers: When you enter transactions into the subledgers of Oracle Applications that support MRC, the transactions are converted to your reporting functional currencies at the time of original entry. As a result, your reporting currency information is immediately available for inquiry and reporting in the subledgers. Each inquiry or report that normally displays information in the primary functional currency can also be displayed in any of the associated reporting currencies. To do so, you log into a reporting responsibility, then view and report transactions in the reporting currencies associated with that responsibility.
You must post subledger transactions to General Ledger in both the primary set of books and in each reporting set of books. After you have posted the transactions, you can log into a General Ledger reporting responsibility, post the newly created journals, then report on the journals and the account balances of the associated reporting set of books.
Oracle General Ledger: For General Ledger journals, you must complete the posting process in both your primary set of books and each associated reporting set of books before you can report on the updated balances. Note that separate balances are updated for each set of books.
Before you can report on your updated balances, you must also post your subledger transactions to General Ledger from both your primary and associated reporting sets of books, and post the newly created journals in both your primary and associated reporting sets of books.
Each General Ledger report or inquiry that normally displays information in the primary functional currency can also be displayed in any of the associated reporting currencies. To inquire or report on the account balances of a reporting set of books, you log into the associated General Ledger reporting responsibility.
When you inquire on account balances in a reporting set of books, you can drill down to the subledger details (in your reporting functional currency) using General Ledger's standard drilldown features.
For reconciliation purposes, you can use the Financial Statement Generator (FSG) to create a custom comparison report that lists balances from your primary and reporting sets of books in separate columns. Use this report as the basis for reconciling your primary and reporting sets of books.
Euro Support: MRC allows Oracle Applications to support organizations that are transitioning from their national currency to the Euro:
Transition Period: If you currently use Oracle Applications, you can continue to maintain your current set of books in your national currency and use MRC to begin reporting transactions and financial results in the Euro. If you are implementing Oracle Applications for the first time, you can set up your primary set of books using Euro as the functional currency and use MRC to report transactions and financial results in your national currency.
Currency Conversion: MRC observes the fixed-rate relationships you defined between the Euro and EMU currencies, as well as the effective starting dates of those relationships, when converting transaction amounts to or from the Euro or EMU currencies. When converting amounts from your primary functional currency to your reporting functional currencies, MRC fully complies with the conversion guidelines established by the European Commission.
Setting Up MRCThe following table provides a summary of the steps you must follow to set up MRC in your applications. These steps are described in more detail in the next section.
Note: You must install MRC before you can begin the setup steps in this section. See: Oracle Applications Installation Manual for information about installing MRC.
Step Description
Step 1 Enable or define primary set of books :Set of Books window(General Ledger)
Step 2 Enable and/or define reporting currencies :Currencies window(General Ledger)
Step 3 Define reporting sets of books :Set of Books window(General Ledger)
Step 4 Assign reporting sets of books to primary set of books: Assign Reporting Sets of Books window(General Ledger)
Step 5 Define conversion options for each application: Conversion Options window(General Ledger)
Step 6 Define General Ledger conversion rules: GL Conversion Rules window(General Ledger) Step 7 Define reporting responsibilities : Responsibilities window(System Administrator)
Step 8 Assign reporting sets of books to reporting responsibilities : System Profile Values window (System Administrator)
* Daily rates are used to convert your primary set of book's transactions to the appropriate reporting currencies. If you do not currently maintain daily rates, you must do so when you implement MRC.
Step 1 - Enable or Define Primary Set of BooksIf you currently use Oracle Applications, you must enable your set of books as the MRC primary set of books. If you are installing Oracle Applications for the first time, you must define your primary set of books.
Note: Your primary set of books is where you record your day-to-day business transactions in Oracle Applications. The primary set of books uses a specific chart of accounts, accounting calendar, and functional currency. For MRC purposes, the functional currency is always the primary functional currency.
For each set of books you use with MRC, you need to specify whether it is a primary or reporting set of books. This is done on the Set of Books window, using the Reporting Currency Options alternative region.
Step 2 - Enable and/or Define Reporting Currencies
To use MRC, you may need to enable and/or define additional currencies if the currency you want to use for a reporting set of books is not already enabled or does not appear in the list of predefined currencies. In addition, you need to enable and/or define any currencies you expect to use to enter transactions.
Primary Functional Currency: the currency you use to record transactions and maintain your accounting data within Oracle Applications. The primary functional currency is generally the currency in which you transact most of your business and the one you use for legal reporting.
Reporting Functional Currency: a currency other than your primary functional currency for which you need to report accounting data. For example, as of January 1, 1999, the new pan-European currency, the Euro, will become effective. If you need to report in the Euro currency, you will need a reporting set of books with the Euro as the functional currency. Therefore, you need to enable the EUR currency.
Transaction Currency: the currency in which a transaction originates. For example, if you are a Canadian organization and you trade with organizations located in Japan, you must enable the Japanese Yen if you will be issuing purchase orders, generating invoices, paying bills, and receiving payments in Yen.
Step 3 - Define Reporting Sets of Books
To use MRC, you must define reporting sets of books and associate them with your primary set of books.
A reporting set of books is a financial reporting entity that is associated with a primary set of books. The reporting set of books has the same chart of accounts and accounting calendar as the primary set of books, but usually has a different functional currency.
For example, assume that your company headquarters is located in Australia and that its primary functional currency is Australian Dollars (AUD). Assume also that you have one subsidiary each in Canada and Germany, both of which maintain a primary set of books in its local functional currency -- Canadian Dollars (CAD) for the Canadian subsidiary and Deutsche Marks (DEM) or the Euro (EUR) for the German subsidiary. Each subsidiary should maintain a reporting set of books in AUD, so it can analyze and report transactions using the parent's functional currency.
For each reporting set of books you define, you need to specify it as a reporting set of books on the Set of Books window, using the Reporting Currency Options alternative region.
Other Considerations:
1- If your primary set of books is defined as an average balances consolidation set of books, any associated reporting sets of books must also be defined as average balances consolidation sets of books.
2- If you use combined basis accounting with Oracle Payables, you will have two Payables sets of books (primary and secondary). One will be for accrual basis accounting and the other will be for cash basis accounting. If you want to report Payables transactions in your reporting currencies for each accounting basis, you must define a reporting set of books for each.
Other Set of Books OptionsSome set of books options, such as the chart of accounts and accounting calendar, must be the same in both your primary and reporting sets of books. For other set of books options, we specifically recommend or do not recommend that they be the same in both your primary and reporting sets of books. For still other set of books options, you set them in each reporting set of books depending on what features you want available in that reporting set of books.
Set of Books Options - Recommended Setting in Reporting Sets of Books1- Functional Currency - Different from primary set of books unless you have a specific reason for using the same functional currency in both sets of books (see Note below)
2- Allow Suspense Reporting - Same as primary set of books.
3- Balance Intercompany Journals - Same as primary set of books.
4- Enable Average Balances - Same as primary set of books only if you want to inquire and report average balance transactions in your reporting currency.
5- Enable Journal Approval - Same as primary set of books only if you want journals created directly in your reporting set of books to be processed through your organization's approval hierarchy.
6- Enable Journal Entry Tax - Same as primary set of books. If it is not the same, you will not be able to view tax details when you inquire on journals in your reporting set of books.
7- Accounts - Same as primary set of books.
8- Average Balance Options: Consolidation Set of Books - Must be the same as primary set of books.
9- Enable Budgetary Control - You cannot enable for reporting sets of books.
10- Require Budget Journals - Same as primary set of books if you want to require that budget journals be used to enter budget amounts in your reporting set of books.
[ In some circumstances, you may want to use the same functional currency for both your primary and reporting sets of books. For example, for financial or currency management. You can apply different revaluation options in the primary and reporting sets of books, providing different financial information for each set of books.]
Step 4 - Assign Reporting Sets of Books to Primary Set of Books: Use the Assign Reporting Sets of Books window to assign each reporting set of books to its related primary set of books. Note the following rules:
1- You can assign up to eight reporting sets of books to a single primary set of books. Most organizations will find no need to assign more than three.
Caution: If you need to assign more than three reporting sets of books to a primary set of books, be aware that each additional assignment will have an incremental impact on your system's performance and disk space consumption.
2- You can assign the same reporting set of books to more than one primary set of books, provided they all have the same calendar and chart of accounts. You might want to do this if you need to consolidate transactions from multiple primary sets of books (with the same or different functional currencies) into the same reporting currency.
3- You cannot assign a primary set of books to another primary set of books, or to a reporting set of books.
4- If you use combined basis accounting in Oracle Payables, you only need to assign the related reporting set of books to your Payables primary set of books in this step. The relationship for the Payables secondary set of books will be made in the next step when you define the Payables conversion options.
To assign a reporting set of books to a primary set of books:1. Navigate to the Assign Reporting Set of Books window.
2. Select your primary set of books from the list of values. The set of books' functional Currency, Chart of Accounts, and accounting Calendar will be displayed.
Note: Only those sets of books that have been defined as a primary set of books will be included in the list of values.
3. From the list of values in the Reporting Set of Books region, select the reporting set of books that you want to assign to the primary set of books. The reporting set of books' functional currency will be displayed.
Only those sets of books that have been defined as a reporting set of books will be included in the list of values.
4. Choose the Conversion Options button to define conversion options for each combination of Oracle Application and operating unit for which you want to convert transactions to your reporting functional currency for this reporting set of books.
5. Save your work.
6. Repeat the previous three steps for each reporting set of books you want to assign to the primary set of books.
Step 5 - Define Conversion Options for Each Application For each reporting set of books assignment you make, you must define conversion options for each combination of Oracle Application and operating unit for which you want to convert transactions to your reporting functional currencies. You can set conversion options for these applications:
· General Ledger
· Assets
· Payables
· Receivables
· Projects
· Purchasing
When you use Oracle Applications' Multiple Organizations feature with Payables, Receivables, Purchasing, or Projects, you need to define your MRC conversion options at the operating unit level.
For Assets, you define conversion options at the Asset Book level. For General Ledger, you define conversion options at the application level only.
Conversion options you can set include the reporting conversion type, the action to take when a conversion rate cannot be found, and the range of effective dates for which transactions should be converted to reporting currencies. Also, you need to set some application specific options, such as
Oracle Assets: specify the Asset Book (depreciation book).
Oracle Payables: optionally specify the AP Reporting Secondary Book if you use combined basis accounting.
General Ledger: specify GL Conversion Rules, which control journal conversion at the journal source and category level.
To assign conversion options to Oracle Applications:1. From the Assign Reporting Set of Books window, choose the Conversion Options button. The Conversion Options window will appear, displaying your primary and reporting set of books information.
2. Select Operating Units/Books from the poplist.
3. In the region below the poplist, select the application for which you want to define conversion options.
4. Enter your operating units/books information.
5. Choose Conversion Options from the poplist. The Conversion Options alternative region will appear.
6. Enter your conversion options.
7. Save your work.
Operating Units/Books Information:
1- Operating Unit: For Payables, Receivables, Purchasing, or Projects, specify the operating unit for which your conversion options apply. This allows you to define different conversion options for each operating unit. Also, if you don't want an operating unit's transactions converted to your reporting currencies, you can choose to omit that operating unit when you define the conversion options for the related application.
2- Asset Book: For Assets, specify the asset depreciation book for which your conversion options apply. The asset depreciation book can be either a corporate book or a tax book. You can associate multiple asset depreciation books to a reporting set of books.
The asset depreciation book you specify must be linked to your primary set of books.
AP Reporting Secondary Book: For Payables, enter the AP Reporting Secondary Book if you use combined basis accounting and want your Payables secondary set of books transactions to be converted to your reporting currencies.
Conversion Options
1- Reporting Conversion Type: The conversion rate type MRC uses to retrieve exchange rates for converting transactions to your reporting currency. This differs from the conversion rate type you specify when you enter a transaction. Oracle Applications use the transaction conversion rate type to retrieve exchange rates for converting entered amounts from the transaction currency to your primary functional currency (alternatively, you can specify your own rate).
- You must enter a Reporting Conversion Type when defining conversion options for your subledger applications, such as Payables and Receivables.
- For General Ledger, the reporting conversion type is set for specific combinations of journal source/category on the GL Conversion Rules window.
- For the reporting conversion type, you can specify your own conversion rate type or choose one of the predefined rate types. To specify your own, you must first define it in General Ledger.