What is the difference between spot, corporate, user, and fixed rate types?

Using Rate Types: Examples

There are four seeded conversion rate types in Oracle Fusion applications:

• Spot
• Corporate
• User
• Fixed

 Spot, corporate, user, and fixed conversion rate types differ based on the fluctuations of your entered foreign currency and your company procedures for maintaining daily rates.

Rate Type	Usage
Spot	For currencies with fluctuating conversion rates or when exact currency conversion is needed.
Corporate	For establishment of a standard rate across your organization for a stable currency.
User	For infrequent entries where your daily rates for the entered foreign currency are not set up.
Fixed	For rates where the conversion is constant between two currencies.

If you have infrequent foreign currency transactions, the user rate type can simplify your currency maintenance while providing an accurate conversion rate on the date of the transaction.

Scenario

You are the general ledger accountant for In Fusion America Inc. You are entering a journal entry to capture three transactions that were transacted in three different foreign currencies:

• Canadian dollar (CAD): A very stable currency
• Mexican Peso (MXP): A fluctuating currency
• Hong Kong dollar (HKD): An infrequently used currency

You enter two lines with accounts and amounts for each foreign currency transaction. Based on your company procedures, you select the appropriate rate type to populate the rate for Corporate and Spot rate types from your daily rates table. You manually enter the current rate for the User rate type.

Currency Selected	Rate Type Selected	Reason
CAD	Corporate	Entered a periodic type of transaction. Your company has established a daily rate to use for the entire month across divisions for all transactions in CAD. CAD is a stable currency that only fluctuations slightly over the month.
MXP	Spot	Entered a periodic type of transaction. Your company enters daily rates each day for MXP because this currency is unstable and fluctuates.
HKD	User	Entered a one time transaction. Your company does not maintain daily rates in HKD.

Note

Your company does not currently use the Fixed rate type. From January 1, 1999, the conversion rate of the French franc (FRF) against the euro currency (EUR) was set at a fixed rate of 1 EUR to 6.55957 FRF. Your French operations were started in 2007, so you maintain all your French business records in the EUR.