Translation and Reporting Currencies

Reporting currencies are representations of a primary or secondary ledger in another currency. Reporting currencies share the same chart of accounts, accounting calendar, and accounting method as their related ledger.

You can use reporting currencies for online inquires, reporting, and consolidation.

When you create a reporting currency, you select a currency conversion level (Balance, Journal, or Subledger), which determines the level of information that's copied from the ledger to the reporting currency. If you set the currency conversion level to Balance, the Translate General Ledger Account Balances process restates the actual account balances from the ledger currency to the reporting currency.

The setup for translation includes creating daily rates and optionally, historical rates or amounts. In addition, the translation process is affected by:

• Reporting currency translation options

• Ledger options

• Accounting calendar setup

Note: The Remeasurement method uses the same processes and setup as the Equity Translation method, just with some differences in the configuration. For example, to remeasure you would specify the appropriate net income account as the Cumulative Translation Adjustment Account in your ledger options setup, whereas to translate you would specify an equity type account.

Reporting Currency Translation Options

When you create a reporting currency, you specify currency translation options. Currency translation options include translation rate types and translation rules.

Translation rate types identify the type of rate used to translate income statement and balance sheet accounts. You can set default values for these rate types on the Specify Ledger Options page to ensure new reporting currencies have the same default value.

• Period Average Rate Type: Type of rate used for the Period to Date method of translation, typically with income statement and equity accounts.

• Period End Rate Type: Type of rate used for the Year to Date method of translation, typically with asset and liability accounts.

Note: Historical rates and amounts that are assigned to a specific account combination override period average and period end rates.

Translation rules determine how period amounts are translated. Asset and Liability accounts are always translated using the Year to Date translation rule.

• Revenue and Expense Translation Rule: The default setting is Period to Date, but you can change it to Year to Date before running translation for the first time.

• Owner's Equity Translation Rule: The default setting is Period to Date, but you can change it to Year to Date before running translation for the first time.

Caution: Set translation rate types and translation rules carefully before running translation for the first time. If changes are required after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process.

Ledger Options

The translation process also uses the Retained Earnings Account and the Cumulative Translation Adjustment Account from the related ledger. You specify these accounts in the Period Close section on the Specify Ledger Options page.

Caution: Set these accounts carefully before running translation for the first time. If changes are required after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process.

Accounting Calendar Setup

When defining the start date for an accounting calendar, select a period before the first period in which you plan to load history or perform translations. You can't run translation in the first defined period of a ledger calendar.

Making Setup Changes After Running the Translation Process

You should rerun the translation process if you post additional journal entries or change rates. However, if the following setup requires changes after translation has already run, you must delete the translated balances, rebuild the balances cube, and rerun the translation process after changing the setup.

• Translation rules

• Translation rate types

• Retained earnings account

• Cumulative translation adjustment account

• Initial translation period

• Account type classification for natural account segment values