Application Support Note

ASN-2004-202

axis diplomat & the Euro (€)

Last Reviewed: 05 November 2004

Products affected: axis diplomat 2004 and 7.4 Accounts

Description:  Notes on impact of euro.

1. Introduction:

Until such time as the United Kingdom enters monetary union, the euro should be treated as simply another foreign currency; which is exactly what it is in relation to Sterling.

2. Details:

axis diplomat foreign currency facilities will handle the euro quite happily. Most axis diplomat customers dealing with the European Community will already have the required software. At least one sales and/or purchase ledger will need to be created to accommodate customers/suppliers trading using the euro.

 

Existing ledgers in the appropriate European local currencies, e.g. Francs or Lira, may continue to operate, if required, until local currencies are officially withdrawn in 2002. In the meantime UK banks will continue to quote exchange rates between European local currencies and Sterling.

3. Action:

axis diplomat users without the foreign currency facilities will need to purchase the axis diplomat Foreign Currency module if they wish to process transactions within axis diplomat in euros.

Companies should continue to trade with their European customers and/or suppliers in the national currency of that customer or supplier until they are notified that the customer or supplier wishes to trade in euros. At this time a new account should be opened for the customer or supplier in the appropriate euro ledger. Ideally, at this time, the old national currency account should be cleared by a payment in the national currency. The 'old national currency' account may then be closed.

If payment is made in another currency (e.g. in euro) the UK bank will be able to convert the payment to the 'old national currency' which can then be posted to the 'old national currency' account in the usual way. Any small discrepancy can be written off with a journal to an exchange variance account.

Alternatively, pay the amount received into the euro bank account with the contra to a 'euro exchange variance suspense account'. Then clear the 'national currency' invoices by a journal, for the national currency total of the invoice(s), between the customer's 'old national currency' account and the 'euro exchange variance' account.

Revision History

1.3	22.06.2004	Updated for axis diplomat 2004
1.2	13.12.1998	Document Reformatted
1.1	26.11.1998	Information on axis diplomat operation during the transition period added
1.0	11.11.1998	First Draft