Skip to Content
0
Former Member
Sep 09, 2013 at 06:11 AM

IHC - managing multiple currencies in same external bank account

390 Views

Hi IHC experts,

I have several questions with respect to how foreign currencies are handled in IHC.

A client of mine is implementing IHC. They currently have one current account opened with their external bank. The account's main currency is USD, but they have negotiated the ability to hold amounts in other currencies eg. JPY, CNY, AUD. For example below, they might be holding up to 4 different currencies in their bank account at any point in time.

Scenarios in question

-------------------------------

1. How do we map this external bank account in IHC, taking into consideration the various currencies it may be holding at any point in time? Is the following the correct account structure to have:

The client has subsidiaries in US (which is the IHC), China and Australia but not Japan.

i. Create an account in the system with account currency USD and assign to the IHC in US

ii. Create an account in the system with account currency CNY and assign to subsidiry in China

iii. Create an account in the system with account currency AUD and assign to subsidiary in Australia

Is what I've suggested the right structure to have? The client has no subsidiary in Japan, so how do we reflect the JPY currency amounts held in the external bank account?

2. Internal/External Payments

i. A subsidiary in Australia would like to make an internal purchase from a subsidiary in China. If the China subsidiary issues the vendor invoice in CNY, how should it be handled?

ii. A subsidiary in Australia has made a purchase with a vendor in China, and the IHC would like to use the CNY held in their external bank account to settle the payment. How should this be handled?

iii. A subsidiary in Australia has made a purchase with a vendor in Japan, and the IHC would like to use the JPY held in their external bank account to settle the payment. How should this be handled?

iv. How does IHC handle forex gains/losses

3. Cash concentration

---------------------------------

i. At day end or period end the client would like to perform cash concentration to adjust the amounts it wants to hold in foreign currencies. How can this be performed in the system using the standard cash concentration interface?

ii. After the cash concentration run is done, it would like to issue payment requests to it's external bank to perform the adjustments in foreign currency holdings. How can this be done?

4. Account balancing

-------------------------------

i. Same as no. 3, the client would need to calculation interests earned in the various currencies, and also calculate all foreign currency translation charges incurred. How does IHC handle foreign exchange charges?

ii. How does IHC handle forex gains/losses in this case, where the a certain amount of funds is translated from account currency (USD) to another currency (CNY) for holding purposes?

I would appreciate any sort of help. All questions don't have to be answered at once, if you only have the answer to a certain part, I'll very happy to hear from you already.

Thanks,

Timothy