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FP6 Financial Info & FAQs --> Project --> Cost Statements --> Cost Statement FAQs


How can we deal with Exchange Rates?


Contracts, funding, payments and cost statements in FP contracts are all in Euros. Several EU Member States and all Associated States use currencies other than the Euro. Thus there is some risk in taking what is effectively a fixed price contract in a foreign currency.


It has been normal practice and usually mandated by FP5 contracts, when submitting periodic cost statements to use the official Euro exchange rate of the first of the month following the period. The official monthly exchange rates are made available on the web under the Europa server (please look at our links - exchange rates section). In the past when there has been wide fluctuations of the Euro against other currencies this has caused some problems and a great deal of concern in some organisations. Although there was always means to minimise or offset at an organisational level, the problem has been addressed in FP6 directly. In FP6 they have introduced a different in the exchange rate policy. It is now possible in the cost statement to choose to convert at the period end (i.e. final date on form C) exchange rate or on a daily basis (strictly with dual currency accounting in books of account, but PO’s and auditors often accept working papers using daily rates for each transaction  - but not monthly averages or month end rates). However you may not “pick and choose according to what is best at the time – once a system is applied it should be used consistently. This hopefully will give some relieve from currency fluctuations


Note that on an accruals basis of reporting the daily exchange rate should be the date when the expense is incurred (usually corresponding to the invoiced date or month end for salaries) but where a cash basis reporting is used the daily rate is at the date that the payment is reflected on the bank statement.

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