Defining Reporting Currencies and Secondary Ledgers for Existing Primary or Secondary Ledgers

If you want to define reporting currencies or secondary ledgers for an existing ledger, you can initialize the account balances for each new reporting currency or secondary ledger using the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process.

This table describes the terms related to balance initialization.

Term	Definition
Backdated transaction	A journal that was posted after the balance initialization process was run to a period in the existing primary or secondary ledger that’s prior to the specified initialization period.
Balance initialization period or initialization period	The initial period where journals are converted to the new reporting currency or secondary ledger. It's also where account balances are initialized. The list of values for this period is prepopulated with the first future enterable or never opened period from the existing primary or secondary ledger.
Initialization rate	The currency conversion rate defined between each entered currency in the existing primary or secondary ledger and the ledger currency of the new secondary ledger or reporting currency. It's determined based on the balance initialization conversion date and rate type specified during setup. This rate is used to convert balances and initialize account balances in the new secondary ledger or reporting currency during the conversion process. Conversions involving Economic and Monetary Union (EMU) currencies don't use this rate. Instead, reporting currencies or secondary ledgers adhere to fixed-rate relationships between the Euro and EMU currencies, following regulations related to triangulation and rounding.
Source ledger	The existing primary or secondary ledger.
Target ledger	The new secondary ledger or reporting currency.

The process helps to automatically create initialization journals based on the source ledger’s account balances to record the opening balances for actual, average and encumbrance balances for the first accounting period of the new target ledger.

The target ledger can be at a journal level or subledger level. This process also applies to journal-level reporting currencies associated with secondary ledgers.

After you define a reporting currency for an existing ledger, the application begins converting to the reporting currency any new journals that you post in the source ledger. However, account balances in the reporting currency aren’t automatically initialized and synchronized with the account balances in the source ledger at the time you define the reporting currency. That’s why you must run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process to initialize the balances.

After you define a secondary ledger for an existing ledger, the application begins to convert any new journals that you post in the source ledger if the currencies are different. However, account balances aren’t automatically initialized and synchronized with the account balances in the ledger at the time you define the secondary ledger. That’s why you must run the Create Opening Balance Journals in Reporting Currency or Secondary Ledger process to initialize the balances.

However, in cases where the:

• Chart of accounts of the source and target ledgers are different, then the mapping defined between the source and target ledger will be used and the balances are initialized according to the mapping.
• Accounting method between the source and target ledger is different, then there won't be any impact due to initialization of balances from the source to the target ledger.
• Accounting calendar between the source and target ledger is different, then the target ledger must have a period with a start date that’s the same as the start date of the first future enterable or never opened period of the source ledger. If the given criteria is met, then the initialization period will have a prepopulated value for selection in the ledger options setup, otherwise it will be blank.