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Currency Conversion for Period end accrual for PO is not adhere to accounting guidance

Received Response
edited Sep 25, 2023 5:11PM in Costing 2 comments

Currently, in Oracle, the exchange rate that is used to account a foreign currency denominated Purchase Order is based on the conversion rate type and the conversion rate date in the Purchase Order (In case of the Purchase Orders where the Invoice Match Option is “Order”). Transactions posted in the current month is pulling in exchange rate at the PO creation date (which can be from past years) as opposed to exchange rate for current month.

The overarching accounting guidance says you measure FX transactions into the accounted currency (functional currency) on the date of the transaction occurs. The most correct process would be for the accruals to use the FX rates from the dates of the various receipts (not the PO date) or the month-end dates when the period end accrual is ran. 

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