Transactions before base currency conversion
Wrapping effect on open item transactions
Account conversion effect on open items
Maintain price list in euro for billing, checking
Invoices, payments, statements in euro
Database wrapping a 'dangerous IT solution'
- www.abi.org.uk/theEuroArea/ position/EMUWrapper.asp
If a system “wraps” data, it will give what are called “vertical” rounding errors where the sum of the converted figures does not equal the converted total.
Some packages offer “account level” conversion.
I have seen one case where doing that allowed the entry of unbalanced transactions, putting the trial balance out.
The price list will suffer from the “price accordion” effect in Ireland before base conversion to euro, everywhere else after that.
The Association of British Insurers came to the same conclusion. They say:
A wrapper-based approach introduces ‘reconversion error’ as a permanent feature of all future business written in euro i.e. by doing business with customers in euro, then converting monetary values to sterling for storage, and then later reconverting them back to euro in order to transact further business with the customer, the reconverted euro value may differ from the original . Secondly, by continuing to calculate and store monetary data as pounds sterling, our systems will introduce aggregative and multiplicative errors, when converting from one currency to the other in the course of normal daily processing.