Currency Translator distinguishes between actual increases and decreases in balance sheet accounts and period-to-period changes caused by currency fluctuations. For example:
If you translate the preceding dollar amounts to French Francs using these exchange rates:
After translation, the data is:
After translation, the increase in cash is incorrect because of the currency fluctuation—it should be FF350. Currency Translator adjusts for the fluctuation, in this case adding FF100, and notes the adjustment value in the Adjustment To Cash (v2000.04.000) account.
Most balance sheet accounts must be adjusted similarly, and adjustment values recorded in additional .04 accounts. Currency Translator sometimes makes different adjustments—see Currency Translator, Translation Adjustment.