This refers to foreign currency transactions that are immediately converted at the time of entry to the functional currency of the Set of Books in which the Transaction takes place.
Conversion uses a daily rate that is either supplied by the user or pulled from the Daily Rates Table at the time the transaction is entered.
The Rate Type is simply a label to identify the kind of rate used in a transaction.
In EBS suite, â€œUserâ€ rate Type is reserved, whereas other rate type like "Corporate" and "Spot" used for the seeded data in GL currency table.
When such a transaction is posted, a separate balance is kept in the GL_BALANCES table of all accounts entered in a foreign currency and their equivalent balance in the functional currency.
When you see the information in GL_BALANCES table, which keeps a cumulative balance for the foreign and the functional balance in an account; the rate information is missing. The rate information and the transaction-by-transaction detail is kept in the GL_JE_LINES table. GL_BALANCES only keeps the total amount entered for a particular account in a particular currency and the total functional amount for those foreign transactions. This allows for the segregation of portions of an account balance by the different currencies used in each transaction.
Finally lets compare all three
This table has compares the three Foreign Currency concepts:
Related Posts in series for â€œDealing with Foreign Currencyâ€
- Dealing with Foreign Currency : â€œRevaluationâ€ 
- Dealing with Foreign Currency :â€Translationâ€ 
- Dealing with Foreign Currency : "Conversion"