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Understanding Currency Conversion

This guide explains the concept of currency conversion, how it impacts transaction amounts, and details the structured information provided after conversion. By following this process, customers can accurately convert transactions to USD, even when manual rates are used or future transaction dates are involved.

What is Currency Conversion?

Currency conversion is the process of translating a transaction amount from one currency to another. Our feature supports transactions in 175 currencies, converting them into USD based on the exchange rate for the transaction day. This allows for consistent financial reporting and accurate tax calculations.

How Currency Conversion Works

Several key factors determine the conversion process:

• Transaction Currency: The currency in which the original transaction amount is specified.
• Exchange Rate: The rate at which the transaction currency is converted into USD. This rate is determined by the currency exchange rate on the transaction day or entered manually by the customer.
• Converted Amount: The amount in USD after converting the original transaction currency.

Example Calculation:

Original Transaction-

• Item1 Amount (in EUR): €70

• Item2 Amount (in EUR): €30

Total Transaction Amount (in EUR): €100

Conversion Details-

• Exchange Rate (EUR to USD): 1.1

• Transaction Date Exchange Rate Applied: 1.1

Transaction After Conversion-

• Item2 Amount in USD: €70 × 1.1 = $77

• Item2 Amount in USD: €30 × 1.1 = $33

Total Transaction Amount in USD: €100 × 1.1 = $110

Therefore, with an exchange rate of 1.1 on the transaction date, the €100 total amount is converted into $110.

Steps to Calculate:

1. Identify the Transaction Currency and Amount:
   Determine the original transaction amount in the specified currency.

2. Obtain the Exchange Rate:
   Use the exchange rate for the transaction date to convert the amount into USD.

3. Convert the Transaction Amount:
   Apply the exchange rate to each item amount or the total transaction amount to determine the equivalent USD amount.

4. Determine the Final Converted Amount:
   Calculate the total USD amount after conversion to provide the final amount in USD.

Post-conversion, the information is structured as follows in the response body:

:::note[]
"exchangeRateInfo": {
"totalItemsAmountInUSD": 110,
"transactionSalesTaxInUsd": 0,
"finalTransactionAmountInUsd": 110,
"fromCurrency": "EUR",
"toCurrency": "USD",
"fxRate": 1.1,
"source": "COMPLYT",
"isExchangeRateEstimated": false,
"exchangeRateDate": "2024-01-01T00:00:00"
}
:::

exchangeRateInfo fields:

1. "totalItemsAmountInUSD"- Converted items amount in USD
2. "transactionSalesTaxInUsd"- Converted calculated sales tax amount in USD
3. "finalTransactionAmountInUsd"- Converted final transaction amount in USD (items + sales tax)
4. "fromCurrency"- The original currecny sprcified in the transaction
5. "toCurrency"- The currency in which the transaction was coverted to
6. "fxRate"- The conversion rate in which the transaction amounts was converted
7. "source"- The origin of the "fxRate". CLIENT for manualy entered rate, otherwise COMPLYT
8. "isExchangeRateEstimated"- Indicates whether the conversion rate may change (incase of a future transaction)
9. "exchangeRateDate"- Holds the date that is accurate for the "fxRate" field (the conversion rate)s.

Additional Details

• Manual Rate Option:
  Customers can provide a manual conversion rate through the "refRate" field. If this option is used, the "source" field in "exchangeRateInfo" will show "CLIENT" instead of "COMPLYT."

• Handling Future Transaction Dates:
  If a transaction is set for a future date, the exchange rate for the current day is used. In this case:

"isExchangeRateEstimated" is set to true.
"exchangeRateDate" reflects the transaction’s created date.

For improved accuracy, it is recommended to save the transaction again on the actual created date to ensure the rate aligns with the day of processing.

This feature provides flexibility and precision, accommodating different currencies, manual rate inputs, and future dates, all while maintaining transparent and comprehensive conversion details.