Translating Parent Entities Using Blended FX Rate Children

Parent entity blending using children FX rate will match the parent entity’s total in reporting currency to the sum of its translated child entities, even if each child uses different FX rates (such as entity/rate/amount overrides, WAR, or periodic translation). This is important when the parent entity’s total needs to be tied out to the sum of the translating children in reporting currency.

This also allows the Pillar Two Total which is translated from the Pillar Two Jurisdiction to tie-out to a blended sum of its children. This blended rate reflects child-level differences and can also factor in ownership, if enabled.

Note:

This is applicable only for multi-currency applications.

To use parent entities using blended FX rate children, the following tax settings can enabled:

  • Translation
    • Enables translating parent entities using a blended rate of its children from entity currency to reporting currency

      Tax Settings - Translation: Translating parent entities using a blended rate of its children from entity currency to reporting currency

      • Uses Blended rate for Provision (Entity Currency → Reporting Currency)
      • Enables translating parent entities using a blended/effective rate derived from children.
    • Enables translating entities by directly copying parent currency to reporting currency when they are same

      Tax Settings - Translation: Translating entities by directly copying parent currency to reporting currency

      • Bypasses translation and directly copies Parent Currency to Reporting currency when they are the same
      • If parent currency equals reporting currency, the system copies values directly (no translation).
      • If disabled, the reporting currency may not equal the parent currency even if they are both the same actual currency as amount/rate overrides may have been applied to reporting currency translation of children entities that have not been applied to the parent entity.
  • Pillar Two

    Enables translating Pillar Two Parent Entity using a blended fx rate of its children from pillar currency to reporting currency

    Tax Settings - Pillar Two: Translating Pillar Two Parent Entity using a blended fx rate of its children from pillar currency to reporting currency

    • Uses Blended rate for Pillar Two (Pillar Two Currency → Reporting Currency)
    • Enables translating Pillar Two parent totals using a blended/effective rate derived from children.
    • If enabled, this applies to the translation of the pillar two currency for each pillar two jurisdiction for all entities assigned to that jurisdiction in that Scenario/Year/Period.

Note:

This support is enabled by default.