Job Fixed Exchange Rates

Overview:

The Job Fixed Exchange Rates window allows you to establish fixed exchange rates between a job's base currency and one or more currencies you plan to transact business in during the course of the job. PENTA uses these fixed exchange rates instead of the spot rate to convert the transactions to the base currency. Use this window if you entered into a “hedging” transaction for the job. Companies enter into hedging transactions to reduce risks that can negatively affect the financial outcome of a job. In this case, you enter into a hedging transaction in order to reduce the risk associated with changes in foreign exchange rates.

Forward Exchange Contracts are one common hedging tool that might result in the use of this window. A forward exchange contract is a legal agreement between two parties to purchase and sell a specific quantity of foreign currency at a specified price, with deliver and settlement at a specified future date. If you enter into a forward exchange contract or similar agreement, you can establish the agreed upon exchange rate as a fixed exchange rate so PENTA uses this rate on transactions recorded in the specified currency.

Benefits:

• Ability to assign Job Fixed Exchange Rates for situations where hedging is utilized
  
• Override the spot rate for a given job in favor of a job fixed exchange rate

Roles:

• Accounting Manager
• CFO

Additional Content

• System Option 47 (“Job Exchange Rates Required”) determines whether fixed exchange rates are required for all currencies on a job.

Location:

• Financial & Accounting > Setup > Currency Information > Job Fixed Exchange Rates

Video: