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When you translate average balances, the PATD balance type will be translated automatically, using the appropriate calculated average rates (See: Rates Used for Translation, below). If you have chosen to translate optional amount types (see: Set of Books Average Balance Options), General Ledger will also automatically translate the average balance types you have selected (i.e., QATD, YATD, and/or EOD).
The cumulative translation adjustment account is not translated directly. Instead, once all other accounts have been translated at the appropriate rates, a balancing entry is made to the cumulative translation adjustment account.
| Day | Daily Rate | Average Rate | PATD Balance | Translated PATD |
|---|---|---|---|---|
| 1 | 1.250 | 1.250 | 2,500.00 | 3,125.00 |
| 2 | 1.300 | 1.275 | 3,000.00 | 3,825.00 |
| 3 | 1.280 | 1.277 | 3,250.00 | 4,150.25 |
| 4 | 1.290 | 1.280 | 3,250.00 | 4,160.00 |
| 5 | 1.320 | 1.288 | 3,300.00 | 4,250.40 |
| Table 1 - 29. (Page 1 of 1) | ||||
| 1.25 | * | 31 | (days in January) | = | 38.75 | |
| + | 1.40 | * | 29 | (days in February) | = | 40.60 |
| + | 1.45 | * | 16 | (days in March) | = | 23.20 |
| ---- | -------- | |||||
| 76 | 102.55 | |||||
| divided by total days | 76 | |||||
| -------- | ||||||
| Rate to translate March 16th | ||||||
| average balances | 1.349 | |||||
| ======== | ||||||
Note: You can choose to specify historical amounts rather than rates in the Historical Rates window. General Ledger will calculate, in the same manner that historical rates are calculated, a weighted historical amount to use for translation.
If you define a historical rate or amount in one period, but not in a subsequent period, General Ledger will automatically roll forward the historical rate or amount from the previous period. This is true for all accounts; not just equity accounts.
If you have never defined a historical rate or amount for an account, General Ledger treats the account as non-historical and translates the average balances using an average of daily rates. This is also true for equity accounts, however, General Ledger will warn you in this instance.
The rules you need to follow when changing rate types for translating average balances are shown in the table below. If you violate these rules, the translation process will terminate with an error.
| RATE TYPE FROM: | RATE TYPE TO: | RULES FOR CHANGING |
|---|---|---|
| Average Daily Rate | Historical Rate or Historical Amount | After the first translated period, you can only change in the first period of a year. |
| Historical Rate or Historical Amount | Average Daily Rate | Delete all historical rates or amounts that have been entered since the first translated period. |
| Historical Rate | Historical Amount | No special considerations if the change is made in the first period of a year. To change in any period other than the first period, you must delete all historical rates entered since the first translated period, then enter your new historical amounts starting from that first period. |
| Historical Amount | Historical Rate | No special considerations if the change is made in the first period of a year. To change in any period other than the first period, you must delete all historical amounts entered since the first translated period, then enter your new historical rates starting from that first period. |
| Table 1 - 30. (Page 1 of 1) | ||
Overview of Multi-Currency Accounting
Overview of Average Balance Processing
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