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Duplicating this information is beyond the scope of this user's guide. However, you may find the list of key issues below to be helpful in learning about MRC.
Additional Information: SFAS #52 (U.S.) provides some guidance on the differences between translation, revaluation, and remeasurement. Note that the accounting treatment in other countries may differ from that described in SFAS #52.
Suggestion: As a general guideline, we recommend that you define your primary set of books with the currency that you use to manage your day-to-day business operations.
Primary Set of Books (functional currency = JPY) | Reporting Set of Books (reporting currency = USD) | |
---|---|---|
Organization's Accounting Functional Currency: | USD | USD |
Source transactions denominated in: | JPY | JPY -- Converted to USD using daily rates. |
General Ledger Revaluation: | Run each period to revalue balance sheet amounts denominated in foreign currencies (i.e., other than JPY). | Run each period to revalue balance sheet amounts denominated in foreign currencies (i.e., other than USD). Note that the day-to-day transaction source currency (JPY) is considered a foreign currency in the reporting set of books. |
Revaluation exchange gains and losses: | Recorded as income or expense items. | Recorded as income or expense items. |
General Ledger Translation: | Run each period if needed to translate from JPY to other currencies. | Run only when needed to translate from USD to other currencies. |
Online inquiries and reports: | Amounts are displayed and reported as if JPY was the organization's accounting functional currency. Such reports may be needed to meet local reporting requirements. | Amounts are displayed and reported in the organization's accounting functional currency. |
Table 1 - 31. (Page 1 of 1) |
Additional Information: The balances in your reporting set of books are generally comparable to those you would see if you actually remeasured your primary set of books into your accounting functional currency. There will likely be rounding differences in your account balances since remeasurement uses period rates, compared to the daily rates used to convert amounts that are recorded in your reporting set of books.
Overview of Financial Statement Generator
Overview of Multi-Currency Accounting
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