Using Multicurrency Processing

Let us look at two multicurrency processing scenarios. The first scenario shows how you maintain multiple books using all multicurrency processes; the second scenario compares the single book translation to the results of maintaining a translation ledger within a multibook environment.

This section discusses:

Using Multicurrency Processing in a Multibook Environment
Comparing Multibook Translation Ledger Results to Translation in a Single Book Environment

Note: General Ledger must be installed and the Create MultiBook Accounting Entries in Subsystems check box must be selected on the Installed Products page for multibook functionality to be available in subsystems, such as PeopleSoft Accounts Payable.

The following example demonstrates multicurrency processes in a multibook environment. Suppose that your company uses the following ledger structure:

Field or Control	Description
Business Unit:	C007 (CHF)
Ledger Group:	MULTI-TRAN
Ledgers:	Actuals primary ledger (CHF - inherited from C007). Local (EUR). Report (USD) translation ledger.

Also assume the following currency transactions:

Currency Exchanges	Exchange Rate - Transaction Date	Exchange Rate - Reporting Date
MXN to CHF	0.295	0.297
MXN to EUR	0.179	0.175
CHF to USD	0.602	0.605

The results of using revaluation in a multibook environment is explained in the next section.

Using Revaluation in a Multibook Environment

The following topics discuss various aspects of revaluation processing in a multibook environment.

Beginning Ledger

This table shows the results of revaluation in a multibook environment. Assume that the following balances exist in the ledger. Account 2001 is a balance sheet account; 8001 is a profit and loss account. The base amount calculations are shown to exhibit the derivation of the base currency balance:

Month End Revaluation Journal (Only Revalue Balance Sheet Accounts)

This journal results from running revaluation on the entire ledger group. The revaluation process skips the report ledger because it is specified as a translation ledger. The actuals and local ledgers are revalued. Running journal edit on this ledger carries the adjustments to the base currency of the actuals ledger down to the report ledger.

Ending Ledger

The following table contains the ending ledger amounts after the revaluation:

Translate Within Ledger Process

After revaluation, you run the Translate Within Ledger process, which generates the translation adjustment. Only the report translation ledger are processed. Continuing with the previous example, the report ledger balances are shown as follows.

Beginning Ledger (Report Only)

The following table contains the beginning ledger amounts to appear on the translation ledger for reports only:

Account	Foreign Currency	Foreign Currency Balance	Report (USD)
2001	CHF	29.7	17.881
8001	CHF	–29.5	–17.76
Gain/Loss	CHF	–0.2	–0.121

Account

Foreign Currency

Balance

Report (USD)

2001

CHF

29.7

17.881

8001

CHF

–29.5

–17.76

Gain/Loss

CHF

–0.2

–0.121

Month End Translation Journal

The output journal that results from the Translate Within Ledger process is shown in this example. This example assumes that the translate within ledger step is defined for balance sheet accounts only, but this need not be the case. You can, for example, define your translate within ledger step definition to include profit and loss, or income statement, accounts to be processed at an average rate.

Ending Ledger

The following table shows the ending ledger amounts after you run the translate process for reports:

Account	Foreign Currency	Foreign Currency Balance	Report (USD)
2001	CHF	29.7	17.9685
8001	CHF	–29.5	–17.76
Gain/Loss	CHF	–0.2	–0.121
Translation Adjustment	CHF	0	0.0875

Maintaining a translation ledger within a multibook ledger group results in the same ledger balances as performing a period-end translation on the actuals ledger. To illustrate, the following example starts with the ledger balances for actuals from the example above after revaluation is run on the ledger group with a single book translation: actuals (CHF) to ledger group (USD).

Beginning Ledger

The following table shows the ledger balances for actuals ledger after the revaluation is run on the ledger group:

Account	Currency Code	Transaction Amount	Actuals (CHF)
2001	MXN	100	29.7
8001	MXN	–100	–29.5
Gain/Loss	MXN	0	–0.2

Translation Journal

The following table shows the results of running the translation process on the actuals ledger. The translation is simplified for clarity in this example. The balance sheet accounts are translated at the CRRNT exchange rate and the profit and loss, or income statement, accounts are translated at an average rate.

Assume that these are the currency exchange rates:

Conversion and Type	Exchange Rate on Reporting Date
CHF to USD (CRRNT)	0.605
CHF to USD (AVG)	0.604

Ending Ledger

The following table shows the resulting balances of this single book ledger:

Account	Currency Code	SB Reports (USD)
2001	USD	(29.7 * 0.605) = 17.9685
8001	USD	(–29.5 * 0.604) = –17.818
Gain/Loss	USD	(–0.2 * 0.605) = –0.121
Translation Adjustment	USD	–0.0295

Compare the resulting balances of this single book translation to the balances in the report ledger of the ledger group MULTI-TRAN. The difference of .058 between the translation adjustment and the value for account 8001 is because the profit and loss, or income statement, account 8001 was translated at the AVG rate, and its offset is included in the translation adjustment. If an additional Translate Within Ledger step were defined earlier to process this account at the AVG rate type, the balances would be identical.

Using Multicurrency Processing