3-Tier Currency Architecture

Concept 6 min read Updated July 2026

Here's a question that trips people up in multi-currency accounting: when you bill a customer in euros from your UK company, which sits in a US-headquartered group — what currency is that sale "in"? The honest answer is all three at once. Any amount in a multi-currency group lives at three levels simultaneously, and once you can see those three levels, every foreign-currency figure in REDA stops being confusing. This article lays them out plainly.

Getting there. This is a concept, not a screen — the three levels appear automatically on documents and accounting entries once multi-currency is on. Multi-currency itself is org-wide setup in the REDA Financials Admin app (Financial Admin Console → Financial Setup → REDA Application Settings); see Enabling Multi-Currency.
Access you'll need. Any REDA Financials permission set can see these currency levels on documents and reports; turning multi-currency on is an Accounting Admin v2 (or Accounting Controller v2) setup task.

The three levels

Level	What it is	In our example
1 · Document currency	The currency a transaction actually happens in — what the customer is billed.	A EUR invoice
2 · Functional currency	The home currency the company keeps its books in — everything it records ends up here.	Meridian Properties UK Ltd → GBP
3 · Corporate currency	The single currency the whole group reports in, so all companies can be combined.	Meridian Properties Group → USD

Why three, not one? Each level answers a different person's question. The customer cares about the document currency (what they pay). The company's accountant cares about the functional currency (the books). The group CFO cares about the corporate currency (the consolidated picture). REDA keeps all three so each gets a correct answer.

Following one amount through the levels

Meridian Properties UK Ltd (home currency GBP, in a group whose corporate currency is USD) raises an invoice in EUR. Watch the amount move:

Document → Functional

The EUR amount is converted to GBP at the invoice-date rate and posted to the UK books. The ledger is always in the company's functional currency. The customer still sees EUR; the books see GBP.

Functional → Corporate

For group reporting, that GBP figure is translated to USD — so the consolidated statements show every company in one currency.

The one rule to remember. A company's accounting entries are always recorded in its functional currency. The document currency is just what was billed; the corporate currency is just the group view. The functional currency is where the accounting actually lives.

What's actually stored on every accounting entry

This isn't just a way of thinking — REDA physically writes all three levels onto every Accounting Transaction (the individual debit/credit records that make up the ledger). Each entry carries:

Level	Fields on the entry	Holds
Document	Transaction Debit / Transaction Credit, Transaction Currency, Transaction Exchange Rate	The amount as billed, its currency, and the rate used to reach the home currency
Functional	Debit / Credit	The amount in the entity's home currency — the "real" ledger figure that statements are built from
Corporate	Corporate Debit / Corporate Credit, Corporate Exchange Rate	The amount translated to the group currency, and the rate used

All three levels are populated on every entry, even in a single-currency org — there they're simply identical, with rates of 1. That consistency is deliberate: reports never have to ask "does this entry have a corporate value?"; it always does. Two more details worth knowing:

The rate is fixed at posting. The exchange rate in force on the transaction date is stamped onto the document and its entries. Later rate changes never silently re-value what's already posted — they surface as explicit exchange gains and losses instead.
Each line converts for its own company. On a document whose lines belong to different entities (an intercompany journal, say), every line converts from the document currency into that line's company's home currency — the treatment international standards (IAS 21) expect. Any tiny rounding drift from converting line by line is corrected on the largest line, so debits always equal credits at every level.

How the conversion rates work

REDA reads dated exchange rates, all expressed relative to the corporate currency (the corporate currency itself is "1"). To convert between any two currencies on a given date, it divides one rate by the other — so it never needs a direct EUR↔GBP pair, just each currency's rate against the corporate base.

In plain terms: rate(from → to) = (the "to" currency's rate) ÷ (the "from" currency's rate), using the rates in force on the document's date. You don't calculate this — REDA does — but it's why you only maintain one rate per currency, not a rate for every pair. Details in Exchange Rates.

Where the three levels show up in practice

You'll notice the levels when…	What's happening
An invoice shows a different amount than the ledger	You're seeing the document currency vs the functional currency — both correct.
An exchange gain or loss appears	A movement between levels 1 and 2 — the rate changed between billing and payment. (See Realized/Unrealized FX.)
Group reports differ slightly from the sum of companies	Translation differences between levels 2 and 3 — converting functional to corporate.
A report offers Entity Functional vs Corporate Currency	You're switching between the functional view (one company) and the corporate view (the group). Run a report across entities with different home currencies and REDA switches for you, with the message "Multiple currencies detected — showing in corporate currency".

Where to go next

Understanding Multi-Currency — the big picture behind the tiers.
Exchange Rates — how REDA converts between the tiers.
Currency on Documents — which currency a document takes.
Enabling Multi-Currency — switching it on at both levels.

Frequently asked questions

No. In single-currency mode all three levels are the same currency, so there's nothing to convert. This only matters once you operate across currencies.

It's the currency your Salesforce org designates as its corporate currency (in currency setup), usually the currency of the group's head office. One thing it is never: an individual user's personal display currency — corporate values are the same for everyone, or group reporting wouldn't be comparable.

Because a company's accounts must add up in one consistent currency. If each entry stayed in whatever currency it was billed in, you couldn't total the books. So everything converts to the company's one functional currency at posting.

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