32 Work with Calculations for Balance Restatement

This chapter contains these topics:

Section 32.1, "Overview,"
Section 32.2, "Defining Calculations,"
Section 32.3, "Reviewing Calculations."

32.1 Overview

Navigation

From General Accounting (G09), choose Revaluation and Restatement

From Multi-Currency Processing (G11), choose Financial Restatement

From Multi-Currency Financial Restatement (G1122), choose Revise Computations

Before you can restate a company's currency to another currency for multiple company consolidation, you must define the calculations to be used.

You might find the following calculations useful:

Calculation	Description
Defining company-specific calculations	You can define your calculations for a specific company. And, you can define as many calculations for a company as you need. You might need more than one calculation if, for example, you perform "what-if" analysis using different ledger types.
Using a range of G/L accounts	You can override the source ledger type with a range of accounts. This is especially useful if you have a range of accounts that were previously restated into a particular ledger type. In this example, you simply move the already restated balances from one ledger type to another.
Combining ledger types	You can define a calculation to restate amounts from up to three ledger types into one. They must all be denominated in the same currency.
Translation adjustment accounts	You can specify one specific business unit to use as the business unit portion of each translation adjustment account (for balancing adjustments or gain/loss amounts due to currency fluctuations). Or, you can use an * (asterisk) for the business unit. When you use *, the system uses the company being restated as the business unit and the specified object and subsidiary account. If the Compute Restated Balances program does not find the specified account for the appropriate business unit, it stops processing that company and includes an error message on the report. Processing for other companies continues normally.

The system retrieves information from the Company Conversion Parameters table (F1114).

This section contains the following:

Defining Calculations
Reviewing Calculations

32.1.1 Before You Begin

Enter or revise currency rates. See Chapter 31, "Define Restatement Rates."

32.2 Defining Calculations

You must define the calculations to be used for restating balances by providing the following information:

Company
Ranges of accounts
Destination currency
Source and destination ledger types

To define a calculation

On Revise Computations

Figure 32-1 Revise Computations screen

Description of "Figure 32-1 Revise Computations screen"

Complete the following fields:
- Computation ID
- Company
- From Ledger 1
- To Ledger Type
- To Currency Code
Complete the following optional fields:
- From Ledger 2
- From Ledger 3
Complete the following fields for each range of accounts:
- From Account
- Thru Account
- Explanation
- Rate Type
- Calculation Method
- From Ledger Type (optional)
Access the detail area (optional).

Figure 32-2 Revise Computations screen (Detail Area)

Description of "Figure 32-2 Revise Computations screen (Detail Area)"
Complete the following optional fields:
- From/Thru Business Unit
- Override Rate
- Translation Adjustment Account
Verify that any gaps between account ranges are intentional.
Press Enter.

Field	Explanation
Computation ID	This character or number identifies the computation to be used for Balance Currency Restatement. You can apply a single computation to multiple companies. You can define multiple computation IDs for one company in the Currency Restatement program. The computation ID value can be set on Company Numbers & Names for each company. The system uses the company ID and the company code to identify the record.
Company	The number of the company that has balances to be restated. Form-specific information A code that identifies a specific organization, fund, entity, and so on. The code must identify a reporting entity that has a complete balance sheet. At this level, you can have intercompany transactions. The system uses the company code and the computation ID to identify the record.
From Ledger Type 1	A user defined code (09/LT) that identifies a ledger type. Form-specific information Enter the first of three possible ledger types to be used in the currency restatement process. The system converts the balances from these ledgers and adds them together prior to applying the restatement rate. If you are restating ledger type AA, it must be in ledger type 1. Note: All three ledgers must have the same currency.
To Ledger Type	The ledger type in which you want the converted amounts stored. This ledger type must be defined in the user defined code list 11/TL for restatement and in the general ledger type list 09/LT.
To Currency Code	A code that represents a currency. Form-specific information The code of the currency to which the company's balances will be converted. It can be any code defined on the Designate Currency Codes form.
From Ledger Type 2	A user defined code (09/LT) that identifies a ledger type. Form-specific information Enter the second of three possible ledger types to be used in the currency restatement process. The system will add these ledgers prior to applying the restatement rate.
From Ledger Type 3	A user defined code (09/LT) that identifies a ledger type. Form-specific information Enter the third of three possible ledger types to be used in the currency restatement process. The system will add these ledgers prior to applying the restatement rate.
From Account	The beginning account in the range of accounts on which you want the computation performed. This number must be entered in the object.subsidiary format.
Thru Account	The ending account in the range of accounts on which you want the computation performed. This number must be entered in the object.subsidiary format.
Calculation Method - Balance or Period	The calculation method to use for Currency Restatements. Codes are: 0 – Period Calculation. This uses the net period posting total. 1 – Balance Calculation. This uses the account balance. Period calculations are typically used for Profit and Loss and Equity account restatements. Balance calculations are usually used against the balance sheet accounts. Period calculations use the net posting amounts for the specified period only and restate using the appropriate rate. Balance calculations retrieve the year-to-date account balance for the restatement. Form-specific information If you do not supply a calculation method, the system uses the default method from the data dictionary.
From Ledger Type	The ledger from which the balances are to be converted. The most commonly used ledger type is AA. Form-specific information Enter the override ledger type to be used for this detail line of business unit/account range selection. The system will use this ledger type for this detail instead of the From Ledgers types listed in the header of the form. For example: CA ledger type for monetary accounts or XA ledger type for historical balances from a company's alternate ledger type, such as fixed assets.
Override Rate	The conversion rate that the system uses to convert foreign currencies to domestic currencies. If the Multi-Currency Conversion option on the Set Multi-Currency Option form is set to Y, this rate is a multiplier. If it is set to Z, this rate is a divisor. Form-specific information The override exchange rate to use in place of the active rate to calculate the currency restatement. If you leave this field blank, the exchange rate in the Currency Restatement Rates table (F1113) is used.
Translation Adjustment Account	The account to use for the currency translation gain or loss amount. You can use one of the following formats for account numbers: BU. Object. Subsidiary 25-digit unstructured number 8-digit short account ID number Speed code The first character of the account indicates the format of the account number. You define the account format in the General Accounting Constants program (P000909). Form-specific information If you do not specify an account in either the header field or the fold area fields, the system does not calculate currency translation adjustments. Use this account to ensure a balanced chart of accounts in your destination ledger. If you specify a translation adjustment account in the header, it is used for differences caused by rounding in the entire calculation. The system totals debits and credits, and then updates this account with the difference. If you specify a translation adjustment account in the fold area, it is used for differences for only the range of accounts specified on the associated detail line.

32.2.1 What You Should Know About

Topic	Description
Reviewing calculations	After you define calculations, you should review them. You can review calculations on Revise Computations by: Completing all of the fields in the header area. If you leave any field blank, the system tries to find matching blank data. Entering partial header information and choosing Next Computation. The Review Computations form provides more flexibility in locating calculations. See Section 32.2, "Defining Calculations."
Validating entries	When you add or revise calculations, the system: Verifies that the beginning account is equal to or greater than the ending account. Checks each account range against the others to make sure that they do not overlap.
Retained earnings	The account number used for Retained Earnings should not be included in the account range for translation. Since this is a calculated field from annual close, the value should simply be copied over from the AC ledger. Within the fold area, an override exchange rate of 1.0000 is commonly used.

Topic

Description

Reviewing calculations

After you define calculations, you should review them. You can review calculations on Revise Computations by:

Completing all of the fields in the header area. If you leave any field blank, the system tries to find matching blank data.
Entering partial header information and choosing Next Computation.

The Review Computations form provides more flexibility in locating calculations.

See Section 32.2, "Defining Calculations."

Validating entries

When you add or revise calculations, the system:

Verifies that the beginning account is equal to or greater than the ending account.
Checks each account range against the others to make sure that they do not overlap.

Retained earnings

The account number used for Retained Earnings should not be included in the account range for translation. Since this is a calculated field from annual close, the value should simply be copied over from the AC ledger. Within the fold area, an override exchange rate of 1.0000 is commonly used.

32.3 Reviewing Calculations

After you set up your calculations for balance restatement, you should review the information to ensure that the balance restatement is correct and complete. You should verify that:

All gaps between ranges of accounts are intentional. The system will not perform restatements for missing accounts, and the balance of the missing accounts might be entered into the translation adjustment account defined in the header part of the Revise Computations form.
You have the correct rate types and calculation methods associated with the account ranges.

Information for review is stored in the Company Conversion Parameters table (F1114).

To review calculations

On Review Computations

Figure 32-3 Review Computations screen

Description of "Figure 32-3 Review Computations screen"

Locate all computations, or complete any of the following fields in the header part of the form to limit the search:
- Computation ID
- Company
- To Currency Code
- From Ledger Type 1
- To Ledger Type
Review the following fields for gaps between ranges of accounts:
- Through Account
- From Account
Verify the following fields:
- Rate Type
- Calculation Method

Field	Explanation
Company	The number of the company that has balances to be restated. Form-specific information The Company field in the header part of the form specifies the companies you want displayed. An asterisk (*) in this field displays all companies. The Company field in the detail part of the form displays the company of each computation.
To Currency Code	A code that represents a currency. Form-specific information The code for the currency to which the company's balances will be converted. It can be any code defined on the Designate Currency Codes form. Use the To Currency Code field in the header part of the form to specify the currency for which you want to display exchange rates. An asterisk (*) in this field specifies all currency codes.
From Ledger Type 1	A user defined code (09/LT) that identifies a ledger type. Form-specific information An asterisk (*) in this field in the header part of the form specifies all ledger types.
To Ledger Type	The ledger type in which you want the converted amounts stored. This ledger type must be defined in the user defined code list 11/TL for restatement and in the general ledger type list 09/LT. Form-specific information An asterisk (*) in the To Ledger Type field in the header part of the form specifies all ledger types.

32.3.1 What You Should Know About

Topic	Description
Changing calculations	To change a calculation, access Revise Computations.