What is Dual Currency in Dynamics 365 for Finance & Operations?

March 7, 2019 Jeff Katz

Starting with version 8.1 for Dynamics 365 for Finance & Operations, Microsoft introduced Dual Currency, which enables the reporting currency to be repurposed and used as a second accounting currency. Since the reporting currency can be used as a second accounting currency, the posting logic for the reporting currency has changed. The following modules have been affected: General Ledger, Financial Reporting, Accounts Payable, Accounts Receivable, Cash and Bank Management, and Fixed Assets.

This article provides a brief overview of what changed with Dual Currency and some important adjustments to be aware of.

 

New Posting Logic

It’s important to note that dual currency will change the posting logic for all your transactions that generate an accounting entry to the General Ledger. The below outlines how the reporting currency was previously calculated vs. the new calculation. For example, if you enter a transaction in CAD, CAD is translated to the accounting currency of USD, and the USD amount is then translated to the reporting currency, which is EUR.

  • Old Calculation
    • Transaction currency amount > Accounting currency amount > Reporting currency amount
  • New Calculation:
    • Transaction currency amount > Accounting currency amount
    • Transaction currency amount > Reporting currency amount

 

Module Changes

There have also been changes to several modules which use the reporting currency as a second accounting currency, including:

 

General Ledger

Changes in the General Ledger:

  • Separate exchange rate types for the reporting currency may be defined within the ledger set-up
  • The Reporting currency adjustment journal is a new journal which allows adjustments to be posted to ledger accounts only in the reporting currency
  • Period allocations have been updated to allocate amounts in the transaction, accounting and reporting currencies
  • Foreign currency revaluation already included amounts in reporting currency—now this amount will now be calculated using the transaction currency amount
  • Trial balance list page now includes columns for both accounting and reporting currency, if both currencies are the same the reporting currency column will be hidden

 

Financial Reporting

The financial reporting module will now allow you to include reporting currency amounts, on the column definition, in two ways.

 

  • Existing Way
    • Translate amounts from accounting currency to reporting currency
  • New Way
    • Report directly on the reporting currency amounts posted to the ledger

 

Accounts Payable and Accounts Receivable

The following changes were made in accounts payable and receivables:

  • You can now see reporting currency amounts on transactions, as well as open balances
  • The aging process update enables you to view aging buckets in accounting or reporting currency
  • Updates to various reports and inquiries
  • The foreign currency revaluation process included amounts in reporting currency and now calculates using the transaction currency amount

 

Cash and Bank Management

Cash and bank will now track reporting currency amounts for transactions that are posted against each bank account. Since reporting currency amounts were not previously tracked, a new wizard has been added to add reporting currency amounts to bank transactions, using the reporting currency amounts from the General Ledger. This process updates the subledger tables only. No processes have been changed, but various reports and inquiries have been updated to show the reporting currency amounts.

 

Fixed Assets

Fixed assets will now track reporting currency amounts for transactions that are posted against each asset book. Due to major changes in the depreciation process, this will require user action if upgrading from a previous version of D365 and using fixed assets. Since reporting currency amounts were not previously tracked, a new wizard has been added to add reporting currency amounts to asset book transactions.

Unlike cash and bank where the previous wizard posted reporting currency amounts from the General Ledger, the wizard for fixed assets will find the exchange rate on the date of the first acquisition. This rate will be used to calculate the reporting currency amount that should be posted to the subledger.

Now that the depreciation proposal will calculate in both accounting and reporting currency, updates to the fixed asset journal will show depreciation amounts in the reporting currency. Depreciation transactions will always use the transaction currency as the accounting currency. Two new columns have been added to the grid, Debit in reporting currency and Credit in reporting currency.

 

Important Upgrade Notes

If upgrading to Dynamics 365 for Finance and Operations version 8.1 from a previous version, there are specific steps that must be taken for Cash and Bank and Fixed Assets. It’s recommended to contact Western Computer experts (or your partner) to help you identify any specific needs or steps prior to upgrading.

 

About the Author

Jeff Katz

Jeff is a Senior Solution Architect with experience in all aspects of implementing ERP. He has an excellent record on projects, successfully analyzing, designing, and implementing software solutions to drive the customers’ business needs. In his role as a Solution Architect, Jeff analyses customers’ requirements, designs solutions, and leads implementations.

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