We are developing a system for accounting for the size of an enterprise, and we have a logical design problem that we have not yet been able to solve.
in accordance with GAAP standards, all financial transactions should be stored in one currency only in the database, which is a fairly obvious and logical concept. but how can you satisfy this concept when you have multi-country branches?
our scenario: 1. We have a branch in the USA where the market considers the US dollar as the default currency.
2. We have many branches in Europe, where the market considers the Euro as the default currency.
3. We have headquarters in Dubai, where the market deals with AED as the default currency.
4. To have minimal downtime, each branch has a local system deployment.
5. All local systems must periodically synchronize data with a central database located at headquarters.
Questions:
1. What is the solution used by ERP, such as SAP, SAGE and MS-dynamic, to solve these problems?
2. We thought about creating two default currencies:
a. The default global currency, which will be AED in our scenario.
b. The default local currency is "AED at headquarters, US dollar in US and Euro in Europe."
Is this an acceptable solution or is it considered a violation of accounting standards?
3. Please indicate the links (if any)?
Thank,
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