Multi Currency

Reporting Currency
• Need different currency representation of the primary or secondary
ledgers.
• Reporting Currencies must share the same chart of accounts,
accounting calendar/period type combination, subledger
accounting method and ledger processing options as their source
ledger.
• General Rule: Use reporting currencies instead of secondary ledgers
that differs in currency alone.
• Reporting currencies are maintained one of the following levels:
Subledger level reporting Currency:
1) Complete currency representation of your subledger journals,
General Ledger journals and balances.
2) When using subledger level reporting currency, define currency
conversion rules (instructs to convert subledger and general
ledger data to one or more subledger level reporting currencies).
 Reporting Currency
3) Subledger level reporting currencies maintains:
4) Subledger Accounting: creates subledger journals if subledgers
integrates with Subledger Accounting.
5) General Ledger posting program: general ledger journals if all
other transactions that do not integrate with Subledger
Accounting, including manual journal entries
Journal Level Reporting Currency:
1) Maintains General Ledger Journal Entries and balance in other
currency representation
2) General Ledger Posting program: Maintains journal level reporting
currencies.
3) Journal is posted in the source ledger (primary or secondary), the
journal is automatically converted to the respective currency of
the journal level reporting currency.
 Reporting Currency
• Balance level reporting currency:
1) Maintains the translated balances of the source ledger.
2) When translation is run in the source ledger (primary or secondary
ledger), the translated balances are reflected in the balance level
reporting currency.
 Advantages & Business Reasons
• Advantages:
1) Tighter link to Ledgers.
2) For accounting and reporting in another currency (in addition to the
ledgers primary currency).
3) Can be used with Primary and Secondary Ledgers.
• Business Reasons:
1) Useful for consolidation reporting and analysis.
2) No need to physically move balances to create views of consolidation
data.
3) Beneficial for parent consolidation entities that share the same chart of
accounts and calendar with their subsidiaries.
Revaluation Overview
• Revalue balance sheet account balances
denominated in a foreign currency to reflect the
change in the foreign currency rate from the date a
transaction is entered and the reporting date.
• Prerequisites
• Define an unrealized gain/loss account.
• Define a revaluation rate for each currency by
period.
Revaluation Process
• Revaluation is run at the end of each accounting period as part of
the close process to revalue balance sheet accounts that are
denominated in a foreign currency.
• Calculates the difference between the current cumulative
functional balance of these foreign transactions and the revalued
functional currency balance calculated using the Revaluation
Rate.
• Creates an unposted journal batch to adjust the account balance
to the new revalued balance. The offset account is the Unrealized
Gain/Loss account specified when you run the revaluation
process.
• The journal is then reversed at the beginning of the next period.
The process is repeated until the transactions are settled. The
Realized Gain/Loss is recorded in the appropriate subledger
(Payables or Receivables) and transferred to the General Ledger
at the time the obligation is settled.
Revaluation Example
Revaluation Example
• At the end of the accounting period, the revaluation process
creates an unposted journal to record the change in the
converted balances to the Unrealized Gain/Loss Account. The
journal is posted, and then reversed at the beginning of the next
reporting period.
• In this example:
• The original journal amount entered in Euro remains the
same.
• At period end, the exchange rate has changed to .81 US
Dollars.
• The receivable is still 10,000 Euro, but is now $8,100 US
Dollars.
• The offset of $100 US Dollars is recorded in the Unrealized
Gain account.