What is the Pivot Value?
A pivot currency must be set for all business units, even in a single currency environment.
In a multi-currency environment, one of the three currency values available on each transaction must be nominated as the pivot currency for the business unit. This is the currency via which all other values are calculated, which ensures that arbitrage differences cannot occur.
The pivot currency is identified as part of the business unit definition using Business Unit Setup (BUS).
Note: The period and daily currency conversion rates must be defined from the pivot currency to another currency.
If both base and second base currencies are defined for a business unit, one of these must be chosen as the pivot. If only a base and transaction currency is defined, one of these must be the pivot.
The reporting currency cannot be used as the pivot.
Choosing the Pivot Currency
The currency value you choose as the pivot currency depends on your accounting, revaluation and reporting requirements.
Using Base Currency as Pivot
This option splits the currency risk. This is typically used when the business unit represents a subsidiary reporting to a parent operating in another currency. The pivot is the base currency which is the currency of the subsidiary.
In this situation, local currency fluctuations are absorbed by the subsidiary. On consolidation into reporting currency, the risk between the local book currency and the reporting currency is absorbed by the parent.
This can also be used in high inflation economies, where the second base currency is the revalued base amount.
Using Transaction Currency as Pivot
This option meets GAAP requirements to report in both a base or local currency and a reporting currency. By using the transaction currency as the pivot, all currency risk is taken by the parent. The transaction values are converted independently into the local book (base) currency and the reporting currency. The reporting currency can then be consolidated.
See GAAP Model Business Unit Setup for an example.
Using Second Base Currency as Pivot
This option meets the euro triangulation accounting regulations which, during the implementation of the euro, required organizations in the euro zone to convert between currencies via the euro. The euro was held as second base currency, and the legacy currency as base currency, or vice versa, with the euro as pivot.

Business Unit Setup (BUS) is used to specify the operating environment for a business unit. In SunSystems, a business unit represents an operating entity.
The most important business unit operational choices determine how the multi-currency facilities are to be used, if at all. Four different values can be entered on transactions and maintained for each account.  Click here to read more about Business Unit Setup.