When you specify a foreign currency on a purchase requisition
or purchase order, two values are calculated: the total cost that
is expressed in the foreign currency, and the total base cost that
is expressed in the base currency or your company currency.
Example of currency conversion
Your base
currency is US$ (US dollar). You enter a purchase requisition for
gaskets to be ordered from a French company. On the
PR tab,
select
EUR (Euro) in the
Currency field.
On the
PR Lines tab you enter
25 in
the
Quantity field, and
3.14 in
the
Unit Cost field. Using the active exchange
rate of 1.17726 for the
EUR, two values are
calculated and displayed on the
PR tab:
- Total Cost: (25 x 3.14 Euro) = 78.50 Euro
- Total Base Cost: (78.50 Euro x 1.17726 exchange rate) = 92.41
US dollars