Setting up a GAAP Model Business unit
The GAAP (Generally Accepted Accounting Principles) reporting model is used when the client requires the ability to report in both, your base or local currency and a reporting currency and they need to follow or report using GAAP rules.

If we take the example of an American owned company, which has a division in and operating out of, the UK. This division trades mainly within Europe and Africa.

In this instance, you would define the base currency as GB pounds, the local currency of the division. You would also have transaction currencies from all of the countries, in which this business unit operates. The transaction currency serves as the pivot currency.  This is a multi-code value and therefore various European and African currencies would need to be defined. 

Finally you would define your third currency, a Reporting currency. This would be the currency of your head office in this case US Dollars.

Below is a diagram showing how the currencies would be set up in the above example.

A set of exchange rates would be required between each transaction currency and both the base currency and the reporting currency.

When using the GAAP model the parent company is taking all the risk between transaction currencies and the reporting currency.

The most common multi-currency requirement of our corporate users is the GAAP model.
As the pivot currency is the transaction currency this means that all other currencies will be converted directly from the transaction currency to both the base currency and reporting currency.

If the entry currency is the base currency SunSystems will convert the entry to the reporting currency and also covert to the base currency at a rate of 1 to 1.