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A Compliant Solution for the Euro
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A Compliant Solution for the Euro. Your Business & the Euro. Presentation Format. The Euro EM4 EM4 Processes. The Euro. Requirements Time-scales. The Euro. What is it? A New Currency When will it exist? 1st January, 1999 Why? Major move towards a single market. Impact. - PowerPoint PPT Presentation
Transcript of A Compliant Solution for the Euro
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The Euro
• What is it?– A New Currency
• When will it exist?– 1st January, 1999
• Why?– Major move towards a single market
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Impact
• Monetary amounts to be paid or accounted for
• Fixed Timetable
• Defined Calculation Algorithms
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The Euro
• Effective start of economic and monetary union.– Begins 1st January, 1999– Euro becomes a currency in its own right– NCU’s replaced by the Euro– Fixed Conversion Factors
• Ref.. Articles 2 & 3 of Reg.. 109L(4)
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The Euro
• After 31st Dec. 2001, amounts still expressed in NCU shall be deemed to be expressed in Euros converted at the official rates.
• From 1st Jan. 2002, notes and coin will be introduced with all NCU currency being withdrawn by 1st July 2002(latest).
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The Euro
• Why does the Euro require special handling?
• What is different?
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Conversion Factor:-• Shall be adopted as one euro expressed in the
terms of a NCU.
• Shall be adopted with 6 significant digits.
• Shall not be rounded or truncated
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Conversion Factor:-
• Shall be used for conversions either way between the euro and the NCU
• Inverse rates derived from the conversion rates shall not be used
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NCU -> NCU
• Triangulation– First convert to euro– Euro amount may be rounded to not less than 3
decimals– Then convert to target NCU
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NCU -> Out Currency
• First NCU to Euro using Conversion Factor
• Then Euro to Out Currency using Exchange Rate (GCC)
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Out Currency -> NCU
• Out Currency to Euro using Exchange Rate (GCC)
• Then NCU to Euro using Conversion Factor
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Legally
• Contracts which specify the use of a currency should be completed in that currency
• I.e. Order in FRF, Invoice in FRF, expect payment in FRF
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Commercially
• Customer owes 50,000 DEM, previously invoiced in DEM.
• Offers to pay in Euros
• Do you say ‘No Thanks, I invoiced you in DEM’ – or
• Take the money and lodge it.
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Nice to Have!
• Dual Currency Invoices– Not Mandatory– Dual Pricing mainly aimed at Consumers
• Dual Currency Screen Display– Not Mandatory– Most Screens do not have room
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Nice to Have!
• Dual Currency Reports– Not Mandatory– Lack of Print Positions– If system reports already cater for multiple
currencies, EM4 will apply.
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Germany Italy Ireland
Belgium Spain
Luxembourg Portugal Finland
Netherlands France Austria
The EuroParticipating Countries
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The Euro - Business Impact
• Dual Currency Scenario– Unusual Event– Little Experience
• Specific Conversion Rules– Being Close Will Not Do
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Euro - Company Switchover
• Base Currency Conversion
– Open / Closed Items
– Sub-ledgers
– Business History
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The Transition Period Impact
• Side by Side Currencies
• Application Software
– Fine in 2002(After Conversion)
• Transition Solution
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DEM 1.97632 PTE 202.137
BEF 40.7675 FRF 6.61214
LUF 40.7675 IEP 0.771961
NLG 2.22742 FIM 5.98726
ITL 1942.03 ATS 13.9020
ESP 167.388
Conversion Factors1/1/98
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Who Are We ?Founded: June 1996
Manus Bray and Bill Chisholm20+ years of AS/400 ConsultancyExtensive Experience of SystemsImplementation and Development
Company Mission :
To Become a Market Leader in the Development of First Class End-User Products to Support Existing and Future AS/400 Environments
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Millennium Solutions Reference Sites
• Waterford Crystal Ltd Ireland
• Ciba Speciality Chemicals Worldwide
• ITT USA
• Leo Laboratories Europe
• Sara Lee / Douwe Egberts Worldwide
• CIC Video Europe
• Unichem PLC UK
• Johnson & Johnson Worldwide
• Rhone Poulenc Rorer Worldwide
• BioMérieux Japan
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History Of EM4
• Ciba Specialty Chemicals & Millennium relationship out of MS4– Multiple Installations
• Ciba was looking for a solution– Generic BPCS Solution
• Millennium & Ciba agreed an approach.
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Impact on Finance Dept.
Between 1st January 1999 - 31st December 2001, businesses with multiple companies within EU member states will need to change their base and/or global currency to the Euro.
Existing transactions will differ from one company to another as they are relative to the time at which the transactions were
processed.
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Impact on Finance cont.All in-line data will be converted to the
equivalent Euro amount
=> historical data such as Sales History and Order History will remain relative
=> their graphical representations will remain constant.
This ensures that investors and shareholders do not notice a rise/fall in share value or company performance over that period of time.
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Impact on Finance
The Finance department must be able to ensure that the company's turnover is not affected, although the annual turnover and profit is now illustrated in Euros.
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Impact on IT
It is ultimately the IT department's responsibility to ensure that
• the project runs smoothly, • meets the deadlines assigned and • remains within budget.
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Impact on IT cont.The application structure will determine
the level of IT involvement required. For complex applications where calculated
values and field relationships need to be defined, there will be a requirement for
more IT involvement than in an application where all financial fields are independent.
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Impact on IT cont.
After the conversion has completed, the maintenance of the application
is retained by the IT department.
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EM4 - What is it?• Software Application
• Similar Approach to MS4
• Joining of Business & Software Skills
• Partner Committed to Beta Testing &
Implementation
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EM4 - The Solution
• Search Engine• Fields
• Code
• Encapsulated Code
• Calculation Routine
• Produces Compliant Application
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EM4 - The Solution
• Calculator for Exceptions
– Exceptions will Exist
– Rules Must Be Used
– Uses Same Calculation Routine
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EM4 - The Solution
• Automated Conversion Tool
– You Need to Apply the Rules
– Planning & Testing Needed
– Uses Same Calculation Routine
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EM4 - Future Proof
• Additional Currencies
• Different Transition Periods
• Changes during Transition
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EM4 Technical Information
For technical information regarding EM4, please download our technical presentation from the website www.ms400.com
or contact us by
phone: +353 1 403 5400
email: [email protected]
