Notes on Using Translation with Multiple Reporting Currencies (Oracle General Ledger Users' Guide)


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Notes on Using Translation with Multiple Reporting Currencies

General Ledger's translation feature is used to translate amounts from your functional currency to another currency at the account balances level. General Ledger's Multiple Reporting Currencies (MRC) feature is used to convert amounts from your functional currency to a reporting currency at the transactions level.

MRC is specifically intended for use by organizations that must regularly and routinely report their financial results in multiple currencies. MRC is not intended as a replacement for General Ledger's translation feature. For example, an organization with a once-a-year need to translate their financial statements to their parent company's currency for consolidation purposes, but no other foreign currency reporting needs, should use General Ledger's standard translation feature instead of MRC.

If you use MRC and have properly initialized your reporting set of book's balances (see: Initializing Reporting Set of Books Balances), you can report directly from your reporting sets of books without running Translation. This is because the actual transaction amounts in your reporting sets of books have already been converted from your primary set of book's functional currency. As a result, the account balances of your reporting set of books are automatically maintained in your reporting currency.

For example, to consolidate a subsidiary that maintains a reporting set of books using your parent company's functional currency, you might simply consolidate the reporting set of books to your parent set of books, rather than translating, then consolidating the subsidiary's primary set of books.

In most cases, when you compare the results of using amounts from your reporting set of books rather than translated primary set of book's amounts, there will be rounding differences in your accounts. Many of these differences arise because reporting set of book's transaction amounts are converted using daily rates at the time journals are posted in the primary set of books. Translation, however, uses period or historical rates to translate account balances.

Before you use your reporting set of book's amounts in lieu of translating your primary set of book's amounts, you need to understand and carefully consider:

How Multiple Reporting Currencies works. See: Multiple Reporting Currencies Overview

The country-specific accounting rules and regulations that govern your parent and subsidiary companies.

Budget Balances

If you use MRC and need to report budget amounts in your reporting currency, you will need to translate the budget amounts in your primary set of books, then consolidate the translated balances to your reporting set of books.

Reporting Set of Book's Beginning Balances

If you choose to use MRC for reporting in multiple currencies, you must initialize the beginning balances in your reporting sets of books. We recommend that you use Translation and Consolidation to initialize your reporting set of books.

See: Initializing Reporting Set of Book's Balances

Notes on Using Translation with Multiple Reporting Currencies

Budget Balances

Reporting Set of Book's Beginning Balances

See Also