Some rate application questions

Question

Hi,
  how does the maths for currency translation process work? is it naturally assumed that all the rates is between USD and every other currencies within the rate application?
  within the rate application, there is a dimension called 'ratesrc', and there are 2 members that come with the Apshell application set, i.e. "rateinput" and "ratecalc". What is the difference between them? i was looking through some material for cpm320, and it seemed that after changing from "rateinput" to "ratecalc", some rates change while some remain the same, why is that?
  and within a normal finance application, would there be a case where rptcurrency = USD is used along with an entity where its currency is not USD? if it's possible, what does that mean?
  thanks for your help in advance.
cheers

Answer 1

You don't need to use USD as your triangulation currency, and in terms of the math itself, the logic doesn't require that you use any specific triangulation currency that has a rate of 1.
As a practical matter, though, it is definitely the best way to set things up. If your accounting / finance/ treasury people prefer to use EUR or something else as the triangulation currency, that is perfectly OK. Set the AVG and END rates for this inputcurrency = 1, and express all the other inputcurrency rates in relation to this triangulation currency.
The RateInput/RateCalc setup of RateSrc is left over from an earlier Outlooksoft setup of the rate application. This allowed you to input rates as, for example, units of USD per 1 GBP (to RateInput), and then the system would invert it to GBP : USD (in RateCalc) by dividing "1 / rate". But for other currencies you would enter JPY : 1 USD, and it would not divide 1 by the rate. There was also a property InputCurrency.MD that was driving the default logic in the rate app, which did this division for you. Look at the default logic in the training appset's rate application; it should have something like
*WHEN InputCurrency.MD
*IS D
// do some division
*IS M
// just copy it from RateInput to RateCacl
(It's possible I have the M and D backwards, so look carefully at your own setup.) If you don't need that logic, then either comment it out of the Rate app, or set the InputCurrency.MD property so that it gives you the correct results.
The ApShell setup has slowly moved away from this in the SPRUNCONVERT / SPRUNCONSO buinsess rules (although it still can be done, if you need really need to). Normally, I would just set up one member GLOBAL in the RateSrc (sometimes people call it RateEntity), and express all rates as units of the source currency per 1 unit of the triangulation currency. Accountants who are responsible for currency rates administration are usually pretty good at math, and can divide 1 by a number, so they can get used to it. And of course, in a report, you can flip it around if you want to show it the way people are used to seeing it.
Also, the other reason that the RateSrc dimension is there in the Rate app is because, quite simply, every BPC application must have an entity-type dimension.
I don't quite understand your last question -- but I think this is a very standard case, where the entity's local currency is, let's say Thai baht, and we convert it into a RptCurrency of USD, so we can compare it against all the other entities in a common (group reporting) currency.
As for what does it mean, that all depends on what the business's reporting requirements are. But I suspect your question is something different?
Regards,
Tim