Symptom
What are the implications of assigning a currency to a Business Partner? The below rules when relevant also applies to G/L Account Currency.
Cause
Functionality Description.
Solution
When you add a Business Partner (BP), the following 3 Currency options are available:
- Local Currency (LC)
- Foreign Currency (FC)
- All Currency (AC)
Documents
A BP defined as LC: documents will always be created with LC as the document currency.
A BP defined as FC: documents will always be created with the BP's single foreign currency. Note that regardless of whether the currency displayed at the time of creation is LC or FC, the document currency will be in FC.
A BP defined as AC: the document is created with the Currency that was defined at the time of creation.
Note 1: A document created in FC can be displayed in LC. If the document screen is closed in LC, you find that it is displayed in LC the next time it is opened. This will not change the document currency. The currency in documents does not change after their creation.
Note 2: A document can be created with the System Currency option displayed. This document will be created with the main currency of the BP. The System Currency is always a secondary currency (cannot be the document currency). The system currency is a display currency.
Payments
A BP defined as LC: invoices will be displayed and paid in LC.
A BP defined as FC: invoices will be displayed in FC. Payments can be received in FC or LC.
A BP defined as AC: invoices will be displayed in the Document Currency. Payments can be received in any currency. Payment on Account amounts can only be posted in Local Currency.
Manual Journal Entries
A BP defined as LC: an entry can be created in LC only. FC cannot be entered.
A BP defined as FC: an entry can be created in FC but also as LC only. Only a foreign currency assigned to a BP can be used as a FC. It is possible to enter only FC, however, the system enters a zero entry for LC, which will be picked up by the Exchange Rate Difference functionality.
A BP defined as AC: use any currency.
Manual Reconciliations
A BP defined as LC: when you reconcile this BP, you find that the reconciliation currency is LC. No other currency is relevant.
A BP defined as FC: when you reconcile this BP, you find that the reconciliation currency is the single FC defined. In cases where an exchange rate posting has been made, select the Display LC only transactions checkbox.
A BP defined as AC: when you reconcile this BP, you find that the reconciliation currency is LC. No other currency is relevant.
Period End, relevant for localizations that close the Balance Sheet and the BPs
A BP defined as LC: when you run a period end, the LC balance is brought forward to the new fiscal period.
A BP defined as FC: when you run a period end, the FC balance is brought forward to the new fiscal period.
A BP defined as AC: when you run a period end, the LC balance is brought forward to the new fiscal period. No FC value will be transferred to the new fiscal period.
