mibuso.com

Hi everybody,

I've some problems when doing the applying with NAV, here is my case:

- I've an outstanding payment posted at 30/05/10 with the LCY Code (its Amount is = 200 TND),
- I've an outstanding invoice posted at 28/05/10 in EURO cuurency with an exchange rate of 2 (1 Euro = 2 TND) the amount is equal to 50 Euro (so the Amount LCY is 100 TND),
- I've an other outstanding invoice with 01/08/10 as posting date posted in EURO Currency with an exchange rate of 2,5 (1 Euro = 2,5 TND) the amount is about 40 Euro (so the Amount LCY is 100 TND).

Eventualy, before applying, the Balance (LCY) is equal to 0.

Notice that i defined only the exchange rate for the EURO at 01/01/10 as 1,9

After that, i applied all these entries and i noticed that the Balance (LCY) became different to 0.

NAV used the 1,9 exchange rate where applying all the outstanding entries, and i think that causes this difference.

Anyone has an explaination for this case??

Thanks

Mehdi.

The amount in foreign currency is fixed at the amount at the time of the transaction. The LCY amount varies based on the exchange rate, first at the date of the transaction (or as entered on the order/invoice etc... Then in the meantime if you adjust exchange rates the LCY amount will change based on the difference in rates and you will get an unrealized gain or loss. Then when the transaction is paid (in this case application is done) then the unrealized gain or loss is reversed, the system adjusts the LCY amount based on the exchange rate at the time of application and you get the realized gain or loss.

So what you have explained is standard functionality and also the way it should work from a foreign currency standpoint.

Hi Mehdi,

Gerry is right, with an additional catch: NAV always takes the exchange rate it calculates from the exchange rates table, at the application date. If there is "only" one entry (from a few months ago), this one will be your exchange rate, even though it's outdated and the exchange rates used in the payments are different. Even if you keep the exchange rates table up to date on a daily basis, you can have undesired effects. The conversion takes place for all entries in the application set which are not in the application currency.

with best regards

Jens

Thanks jglathe, gerrykistler for your fast reply,

I understood that is a standard functionality in NAV, but i'm not convinced why NAV use this logic where applying ? And did yours customers accepted this NAV logic ?

Thanks

Yes, it is exactly how foreign currency should work. Otherwise you should bill the customer in local currency or have them pay in the foreign currency.