Data processing: financial – business practice – management – or co – Automated electrical financial or business practice or... – Accounting
Reexamination Certificate
1999-03-15
2002-11-05
Kramer, Dean J. (Department: 3652)
Data processing: financial, business practice, management, or co
Automated electrical financial or business practice or...
Accounting
C705S001100
Reexamination Certificate
active
06477510
ABSTRACT:
BACKGROUND OF THE INVENTION
This invention relates generally to multi-currency production ledgers, and more particularly to methods of converting multi-currency production ledgers to accommodate the unification of several national currencies by respective participating states into a single currency.
With the advent of a global economy and associated global competition, nations in any particular locale are joining together to form unions. These unions may exist to foster greater security to union members strategically and/or economically. An example is the creation of the Economic and Monetary Union (EMU) in Europe. The EMU is a single currency area within the European Union single market in which people, goods, services and capital move without restrictions, through, among other things, the adoption of a unified currency, namely the euro.
The rules, institutions and objectives of EMU are set down in the Maastricht Treaty. The institution responsible for the promulgation and enforcement of the rules of the EMU is the European Commission (EC). The EC Council adopts all the legislation needed for the functioning of EMU, on the basis of proposals from the EC, which is made up of various officials from the participating states, notably the legal status of the euro and the irrevocable conversion rates between the euro and participating currencies, i.e. national currencies of participating states or nations.
The “euro” was introduced as the single currency of the EMU on Jan. 1, 1999 and has to date been adopted by
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member or participating states. These are Belgium, Germany, Spain, France, Ireland, Italy, Luxemburg, the Netherlands, Austria, Portugal and Finland. The conversion rate between the respective participating nations' currencies and the euro has been permanently fixed and so will be stable by definition. For these participating states, the euro replaces the respective participating national currencies, in July 2002 at the latest, when banknotes and coins in national currencies are replaced by banknotes and coins in euro, and the national or participating currency units of the participating member states will definitely cease to exist in all their aspects. However, during the transitional period from Jan. 1, 1999 through Dec. 31, 2001, individuals and businesses may use either the participating national currencies or the euro.
Europe's private sector companies doing business with other participating and non-participating national companies can continue to use the participating and non-participating currencies in their bookkeeping up to Jan. 1, 2002. It will be necessary for the companies, however, to convert their ledgers at some time during the transition period. To evaluate records using participating currencies after Jan. 1, 2002, the participating ledger will have to convert entirely to the euro for all their bookkeeping. They are free to switch over to accounting and bookkeeping in euro at any convenient time during the three-year transitional period providing that this is consistent with national changeover plans.
Non-European based companies that receive payments in participating national currencies must also convert their accounting ledgers to accommodate the new single currency.
In most circumstances, the introduction of the euro will not mean replacing software and computer equipment, unless a company's normal replacement cycle falls within the transition period. However, it does involve a sometimes painstaking examination and amendment of computer programs to ensure that all currency references take account of the euro.
In accounting nomenclature, the term “general ledger” or “booking ledger” is a term of art, referring to individual amounts, and the journal entry transactions behind those amounts, that comprise the assets and liabilities in a particular balance sheet, and the revenue and expenses in a corresponding income statement. In a typical manual booking ledger, there exist many types of journal entries. Such a typical manual general ledger is usually formed by creating a grid system with vertical and horizontal lines meshing together to create boxes that receive account information, names, numbers, dates, numerical values, etc. Customarily, on the left hand side of the ledger is placed account names or numbers while account values known as “transaction currency records”, are input horizontally across the ledger from left to right. Values can be added, converted, subtracted or totaled dependent upon the type of ledger. Separate accounts can be listed vertically from the top down.
In a ledger that contains multi-currency values, a particular transaction currency record is accompanied by its equivalent value in the “booking currency”. The booking currency is the currency in which a particular business primarily deals. For example, if a company in France receives payments in various currencies, the booking currency would likely be in francs. A transaction with a U.K. company in British pounds would then be reflected in the ledger of the French company in GBP as the transaction currency record and the equivalent amount in French francs, the booking currency. This equivalent in francs is known as the “Book One Equivalent”. Sometimes a business may have a “Book Two Equivalent” if the business carries its books in more than one currency.
In addition, each account has a “Book One Amount” that holds the total of all activity for one account regardless of what currencies comprised that activity. Sometimes a business may have a “Book Two Amount” if the business carries its books in more than one currency.
At some point during the European Monetary Union transition period, the booking currency of all participating European ledgers must be converted from their respective participating currencies to euros. Since most of today's businesses track their respective accounting using computer software designed for the task, the software must be updated to convert the value of accounts within a particular booking ledger from participating currencies to the euro. Prior to conversion, it is necessary for the booking ledger to contain values of many different entries in various participating foreign currencies. After the euro conversion, all currencies of the EMU member nations, i.e. participating currencies, need to be converted to Euros in the booking ledger, while non-member nation currencies must also remain in the ledger for consistent bookkeeping.
From a computer software standpoint the term “general ledger” refers to an entire set of files and record types that were designed to give the user sophisticated and wide-ranging control and reporting tools over a particular accounting ledger. The same computer programs now perform all mathematical operations on the data, calculate earnings, spending, profits, losses, and tax liability and perform a myriad of other functions necessary to allow easy access to information about the particular business.
Within the database of a particular business there exists a “master file”, which typically contains a plurality of records including amounts from a company's general ledger. One master file record contains (1) a key identifying the record (comprised of a corporate identifier, user-defined key elements, and a currency code); (2) data fields, such as an account type, description, date opened, etc.; and, (3) amount fields, each assigned numeric field generally having 13 integers and up to 2 decimal places. Each record contains a large number of amount fields, one each for every accounting and adjustment period and period 00 for each amount class. Such a record may be represented as follows:
[CORP, USER-DEFINED KEY ELEMENTS, CURRENCY CODE, data fields, amounts fields------------------ ->]
|<- - - - - - - - master file key fields - - - - - - - - ->|
The term ‘corp’ is used as a corporate identifier to identify a particular company name. For example, for a farm equipment manufacturing company, Ajax, inc., the corp name in the United States might be AjaxUS. The corp name for the Fr
Andrew Johnson, Inc.
Kramer Dean J.
Meola Anthony L.
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