We do have primary ledger in USD(company segmant 1 and 2).As part of merger we need to load new companies form Canada and UK.Canada company segment will be 03 and UK company segment will be 04.



For segment 03 and 04 only GL module will be used and journals will be entered in local currency.I planning to create 2 Reporting currencies for GBP and CAD.Is this correct approach?

Company 1 and 2 have a local currency of USD. Company 3 has a local currency of CAD and Company 04 has a local currency of UK.
You need different primary ledgers for each local currency. So we are talking 3 ledgers in this scenario. If I undertand the situation correctly.

But our client want to use only one primary ledger instead of different ledgers.

Kishore, your client wants only one primary ledger and it can be done but its not right approach.. You will have reporting issues.

The best way to handle this is define primary ledger for each local currency.. If not, then you will define two legal entities and company and associate with existing primary ledger which has USD as functional currency. When you enter transaction for canada and UK company, conversion will take place and you will have amount in USD. Now when you define reporting currency for CAD and GBP you will also get transactions from US company. Not sure if there is any way to exclude based on the companies.. But look at Fx gain/loss.. first converting CAD/GBP based on the daily or user defined rate at the time of transaction and rates at the time of posting..