The advanced settlement function for General ledger allows to settle transactions based on accounting currency. This design has a couple of disadvantages when it comes to settlement of sales and payment transaction in another currency than accounting currency.

Preconditions.
Accounting currency USD
The bank account is a euro account

Business scenario.
A sales order is posed as 1000 Euro at currency 100
The sales order is paid in cash (Payment method cash) against advanced payment "Ledgeraccount"
The bank transaction 1000 euro is recorded against bank and advanced payment at exchange rate 99.
The user wants to settle the 1000 euro from the sales invoice with the bank payment.

Result:
This process fails due to the fact that ledger settlement is only working on accounting currency, and not on transactional currency.
it not an option to perform exchange rate revaluation of the advanced payment account, hence then fact that we a booking the payment against a euro bank account.

Application:
This is a requirement when you have AR transactions which are not settled through AR.
This is also a huge requirement within retail, where you need the ability to settlement ledger accounts for payments in different currencies.