APPENDIX D – Exchange Rate Lookup Logic
Equus Platform allows exchange rates to be specified at the system or company level. Exchange rate settings can be set by company. These settings determine what logic is used to find the appropriate exchange rate.
The exchange rate logic will look for exact or inverse matches first. If an exact or inverted match doesn’t exist, then the system will do a triangulation using the system currency (typically USD) to find an exchange rate. The Exact match and Inverse match are equally weighted, so if an inverse record exists with a date closer to the expense effective date it will be used instead of the exact match.
Exact: A rate can be found from the “From” currency to the “To” currency.
Example: An exchange rate is needed for CNY to EUR. If the system can find an exchange rate where the From currency is CNY and the To currency is EUR, then the system will find an exact match.
Inverse: A rate can be found from the “To” currency to the “From” currency.
Example: An exchange rate is needed for CNY to EUR. If the system can find an exchange rate where the To currency is CNY and the From currency is EUR, then the system will find an inverse match.
Triangulation: Triangulation requires that two rates are available, one is from the From currency to the System currency the other is from the System currency to the To currency.
Triangulation will only use exchange rates where the base currency is equal to the company currency when using company exchange rates.
Triangulation will only use exchange rates where the base currency is equal to the system currency when using system exchange rates.
Exchange rates used in triangulation must have the same effective date (MONTH DAY YEAR - TIME EXCLUDED)
Example: An exchange rate is needed for CNY to EUR. If the system can find an exchange rate where the From currency is CNY and the To currency is USD and a second exchange rate where the From currency is USD and the To currency is EUR, then the system will find an inverse match.
System Level Settings
Any calculation that uses a system level exchange rate will use the # Days Match logic to determine the appropriate exchange rate. The range is specified through the system preferences in the database (these are not specified through the application). The system preferences are called: “Days After” (EXRATEDAFT) & “Days Before” (EXRATEDBEF). When using triangulation, the system currency must be used as the third currency. The system currency (SYSTEMCURR) is set through a system preference in the database. The system currency is by default set to USD.
Note: These (365 & 0) are the system default settings:
Company Level Settings
Exchange rate logic can be specified by company through the Exchange Rate Settings menu. If System is specified as the rate source, then the Exchange rate lookup logic section will not apply.
When using triangulation, the company currency must be used as the third currency. The company currency is specified on the Company screen.
Note: If the Rate Source value is blank or left to **Please Select**, then the company will use System exchange rates.
Compensation (Comp) Accumulator
The exchange rate date for the comp accumulator is determined by the user during import. The user can specify an exchange rate date for the entire file or the Exchange Rate can be specified by payment in the comp accumulator import file.
If an exchange rate can’t be found between the payment and primary payroll currencies, then the import will throw an error. 'No exchange rate found for GBP to CNY on 3/31/09’
The exchange rate logic is standard for the comp accumulator import.
Pay Register
When adding a pay register through the Pay Register screen, through the Pay Register Import, or automatically importing (copying) data into Pay Registers, the following exchange rate logic applies:
If a compensation worksheet* exists for the same payroll calendar period as the pay register, then the compensation worksheet’s home to host exchange rate (or its inverse) will be used.
If an exchange rate can’t be found from a compensation worksheet, then the company level exchange rate settings will be used to find the exchange rate.
If no exchange rate is found based on the company settings, then a system exchange rate will be used.
If still no exchange rate can be found, then no exchange rate will be found and the exchange rate can be manually entered on the Pay Register screen.
* The compensation worksheet must meet the following criteria in order to be used as the source for the primary to secondary exchange rate for the pay register:
The compensation worksheet must be Effective.
The compensation worksheet country currencies must match the payroll system currencies.
The compensation worksheet must have a home to host exchange rate.
If multiple comp worksheets exist for a payroll calendar period, the one with the highest version number will be used.
Note: This exchange rate logic is used to find the primary to secondary pay register exchange rate.
Note: The pay register entry process will not fail because of a missing exchange rate. This means if a pay register is imported or automatically imported in Approved status, the pay register will be approved even with missing exchange rates.
Note: The shadow payroll report uses the same logic as the pay register.
Note: If exchange rates are not in place at the time of import, then the import should be undone and then re-imported.
When a pay register is added to the system, the system calculates and stores the amounts in the pay register in the following currencies: System Currency, Company Currency, Host Currency, and Home Currency, Primary Payroll System currency and Secondary Payroll System currency. A user report can be created to view the currency true up amounts. Please see the User Report guide for an example report.