Understanding As If Restatement

This method of currency restatement eliminates fluctuations in currency exchange rates over a period of time for comparison purposes. When you enter multicurrency transactions, the system uses the current exchange rate to convert amounts from a foreign currency to the domestic currency. Because exchange rates fluctuate, the converted amounts might not be useful for comparison purposes. You can eliminate fluctuations over a period of time by reposting the balances using a single date to retrieve exchange rates as if the exchange rate applied to all transactions. Reposting balances in this way enables you to:

• Recalculate balances by using an exchange rate that is associated with a specific date.

• Record the new balances in a ledger type that is used specifically for as if restatement. This can be the AD (as if restatement) ledger type or any other user-specified ledger type.

You can then compare the new balances with actual or budget balances. For example, a construction company with projects that span multiple years can compare original budget amounts to actual amounts that have been restated by using exchange rates that were in effect when the original budget was prepared. Or a company with sales people located worldwide can report sales figures at a stabilized rate for commission analysis.