Financial Consolidation and Close provides currency translations for a multi-currency application. The default translation process applies the Periodic translation method to Flow accounts and the Year-to-Date method to Balance accounts.
See Translating Data.
Translation During the Consolidation Process
When you consolidate data, currency translation occurs if the parent entity has a different default currency than the child entities. Translation to Parent Currency is performed as part of the consolidation process. The parent currency for any entity that is a child of the dimension name ("Entity") is assumed to be the system currency selected when the application was created.
When the system performs translation, if the source data is not consolidated or if data is impacted, it automatically consolidates the data before translating.
Translation to Reporting Currencies
If you want to translate data into a specific Reporting Currency, you select the target Reporting Currency and perform translation. Only currencies enabled for reporting are available for Reporting Currency translation. All Reporting Currencies have a suffix of _Reporting, for example, USD_Reporting.
Translation to Reporting Currencies is required for all periods. If prior periods in the current year have not yet been translated, they will be translated before the selected period. If there are prior years that have not been fully translated, you will need to translate in sequence each year that has not yet been translated and then translate the current year.
Each entity is translated independently of each other.
- If the default currency of the entity is the same as the Reporting Currency, then the entity currency is moved to Reporting Currency.
- If the default currency of the entity is not the same as the Reporting Currency, then if there is a Parent Entity with a default currency that is the same as the Reporting Currency, the Parent Currency is copied to the Reporting Currency.
- If neither the default currency for the entity nor the parent entity is the Reporting Currency, then the entity currency is translated to the Reporting Currency.
Due to the cumulative nature of some translation calculations, it is recommended that any translation to a Reporting Currency that is neither an entity's Entity currency or Parent currency be executed from the first period of the year.
Note that only entity input and entity consolidation are translated. Proportion, Elimination and Contribution will not show up in Reporting Currency.
The Rate Cube contains all the exchange rate data with respect to any source currency to any destination currency. If there is no Override rate or amount for a Historical Rate account, the system uses the global exchange rate for translation.
You can view the exchange rates used for calculations in a pre-defined data form. You can also use pre-defined forms to enter exchange rates and to enter override rates. See these sections: