The
first and the most important setup in Microsoft Dynamics AX® is Currency setup.
The setup is a mandatory step in Microsoft Dynamics AX®.
If
the organization is dealing with different currencies, then multi-currency
functionality may be used. Further if the organization has multiple legal
entities and the transactions occur in multiple currencies, then maintaining
currencies and their corresponding exchange rate becomes essential. So to deal
with this one has to use the multi-currency functionality.
How
to setup Currency in MS Dynamics Ax 2012?
In
Microsoft Dynamics AX, a list of currencies is provided by default. The currencies
are loaded the first time a user opens the General ledger
parameters form.
To
go to currency list form, click General ledger, click Setup, click Currency, and then click
Currencies.
You
can set the currency code as per the requirement. Further if you want to set
the currency symbol like ₹
(Rupee symbol), first of all change the Current
Currency Setting in the regional setting.
How
to change the Regional Setting?
§
Go
to the Control Panel of windows
§
Select
Region and Language
§
In
the Format Tab select English(India)
§
Click
on the Additional Setting button
You can copy the symbol from here and
paste it on the Symbol Field of MSD Ax 2012.
The check box Reference currency for triangulation
is used to mark a Currency as Triangulation Currency.
What is Triangulation Currency?
It is to handle countries in the EU
where the conversion to the EURO is being undertaken whilst the national
currency is phased out. Basically the triangulation rule is that you have to
convert from one participating currency to another, you must convert via the
euro and round the euro amount to not less than three decimal places. So rather
than a 1:1 currency it goes through the EURO. So say for example Euro convert
to the secondary currency and then convert to the based currency, Euro X 2nd
currency X based currency.
By
default, the EUR
currency
is selected as the Triangulation currency. Only one currency can represent the
Triangulation currency. To change the Triangulation currency, first clear the Reference
currency for triangulation check box on the EUR record in the Currencies form. Then
select the Reference
currency for triangulation on the desired currency.
Microsoft
Dynamics AX 2012 uses the concept of Accounting currency
and
Reporting currency.
§
Accounting Currency: In previous
releases of Microsoft Dynamics AX, this was called the company currency. The
customary monetary unit of measure used to record the converted monetary value
of economic transactions in ledger accounts.
§
Reporting Currency:
This
is the monetary unit of measure used for reporting and financial accounting
purposes. The monetary unit of measure used to record the converted monetary
value of economic transactions in ledger accounts for financial and management
reporting purposes.
Say
for example if the accounting currency is in Rupee and reporting currency is in
USD then based on the exchange rate the accounting transactions are booked with
converted amount with USD.
How
to enable a Currency for Currency Conversion?
The
Currency Converter setup allows numeric conversions for online transactions.
If the Conversion checkbox is selected, the system will
automatically convert transaction amounts in grids using the exchange rates in
the lower pane.
This
setup allows the display of financial information in a currency other than the
default accounting currency
in
forms and reports. This conversion is completed by double-clicking the Currency
converter in
the Status bar in these forms.
Perform
the following steps to convert to another currency.
After
the Currency sign provide a space before so as to separate the symbol and the
amount.
Enter
the date used for the conversion in the Date of rate field, eg.
22-01-2013.Then, click a currency to select the new currency. The Currency
converter
form
will automatically close and the Currency field on the
status bar displays the new currency.
But
remember that exchange rates for the two currencies for the specified date or
date range must exist in the system.
All
the forms, inquiries, and reports that originally displayed amounts in the accounting
currency now display the currency selected.
If
you want to reset the currency to its default accounting currency, then open
the Currency converter form. Click the Reset
button
to return to the ledger accounting currency.
How
to set Rounding Options?
Select
a currency. In the Rounding Rules section, Round the sums
according to a fixed unit, for general transaction amounts. For example,
amounts on transactions are rounded to the nearest unit to 0.01. Specify the
general unit for rounding in the General round-off field.
Also,
Round sums for Sales orders, Purchase orders, and Prices.
For
Rounding Method, select the
rounding convention that applies to the number to the right of the round-off
unit that is entered in the Rounding rule text box.
There
are three options in the Rounding Method dropdown,
these are:-
Normal
– round up numbers 5 and higher and round down numbers 4 and lower. These means
if the number ends with 0, 1, 2, 3, or 4 then the last digit will be 0, and if
the number is more than 4 then the last digit will be increased by one.
Say
for example if the rounding off is 0.01 and the number is 0.004 then it will be
converted to 0.01 and if the number is 0.007 then it will become 0.01.
Downward – This will round down all numbers, whatever the
condition is there, so if we refer the above example then the number will be
converted to 0.00 in the both cases.
Rounding-up – This will round up all numbers, whatever the
condition is there, so if we refer the above example then the number will be
converted to 0.01 in the both cases.
How
to use the Currency Gender option?
The
Currency Gender is used for Spanish speaking countries to define the gender printed
on checks and reports. By default the value for this field is Masculine. So if
you are dealing with the Spanish branch or something like that, then use the
option.
Rounding Option Considerations
All
posting amounts are rounded off to the nearest factor of the specified unit, regardless
of whether they are calculated and posted automatically or entered manually by
the user.
Also
in the General ledger parameters form, the
following must be done:
1.
Specify the maximum rounding amount for a voucher in the default currency, in
the Maximum
penny difference
field.
2.
Set
up the rounding for secondary currencies in the Maximum
penny-rounding in secondary currency field, as shown below.
Exchange Rates
Different
sets of Exchange rates could be segregated into different Exchange Rate types.
So, different exchange rate types could be used for different purpose.
How
to Create Exchange Rate Types?
The
exchange rates types are used entire system. These data types are needed to be setup
once. Exchange rate types are a grouping that allows different exchange rates
for two currencies. These exchange rates are used to convert the transactions
like purchase, Sell, etc.
To
setup the exchange rate, go to the General ledger, click Setup, click Currency, and then
click Exchange rate types. Then click on the New
button
to create a new exchange rate type. Type an ID for the exchange rate type in
the Exchange rate type field and a description in the Name
field.
Close the form.
How
to Create Currency Exchange Rates?
To
create currency exchange rates, select the Currency Exchange
rates
form,
click General ledger, click Setup, click Currency, and then
click Currency exchange rates or you can navigate
from the Exchange rate type form. Select an Exchange
rate type from
the drop-down list. Click the New button. Provide the necessary
exchange rates between a currency pair by selecting a currency in the From
currency and
the To currency drop-down list.
Provide
the Quotation unit say 1. Typically the system is based
on either one unit or one hundred units. If the field is set to one hundred
units, the exchange rate should specify the equivalent of one hundred units of
the foreign currency. For example, if the "From" currency is Rupee
and the "To" currency is USD, then the exchange rate should specify
how many Rupees equal one hundred USD.
Select
a date range in by entering the From date
and
a To Date in the appropriate fields. This
date range is used to filter the display of the exchange rates in the grid. By
default, this range is set to 30 days prior to and 30 days after the current
date.
It
is possible to add multiple exchange rate dates for a single currency pair by
clicking the Add button. It is also
possible to remove exchange rate dates for a single currency pair by clicking
the Remove button.
How
to create Revaluation Accounts?
Since
the rate of exchange is dynamic. Thus changes or fluctuation in rates of
exchange occurs very often. When running currency revaluation, exchange rate
differences may occur due to the change in exchange rates. This is also used in
the customer/vendor settlement of payments and invoices. Revaluation processes
will generate unrealized gain/loss amounts where the settlement process will
generate realized gain/loss amounts.
For
each ledger, define main accounts to account for changes in exchange rate loss
or gain.
To
set up ledger and currency specific exchange rate loss/gain accounts, select General
ledger,
select Setup,
select Currency, and then select Currency
revaluation accounts. Then select
the ledger in the Ledger field. As
shown below.
Select
a Currency
(eg. USD) and define the main accounts that will be posted to for unrealized and
realized gains/losses for the currency in that ledger. Repeat same steps for
each currency.
