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Lab 05 · Multi-country and multi-currency settlement
Scenario: The Saudi company buys goods for USD 100,000, records its books in SAR, and reports to the group in AED. The invoice and payment occur on different dates.
Three currency layers
| Layer | Example | Why it matters |
|---|---|---|
| Document currency | USD | What the supplier or customer agreed |
| Company base currency | SAR | Local ledger, local balances, local close |
| Group reporting currency | AED | Management comparison and consolidation |
The training record must retain the rate, rate date, source or approval, converted amount, and rounding policy. Never compare an MRP ceiling, discount, or margin using values on different tax or currency bases.
Settlement exercise
- Post the USD invoice into the Saudi company's SAR books using the approved invoice-date rate.
- Review the SAR payable and the original USD amount.
- Pay later when the USD/SAR rate has changed.
- Reconcile the bank reference and calculate the realised difference according to the company's policy.
- Revalue open foreign-currency balances at period end only through an approved close process.
- Translate the Saudi result into AED for group reporting and identify translation differences separately from local operating profit.
Consultant questions
- Can each company hold bank accounts in multiple currencies?
- Which rate source is authoritative and who may override it?
- Are customer price lists currency-specific?
- How are credit notes linked to the original currency and rate?
- Which reports are legal-company reports and which are group management reports?
- How are inter-company balances eliminated?
These questions become configuration requirements; they are not answered merely by adding a currency dropdown.