7.12 Consolidation of Results
If the Oracle ALM Process optionally specifies Consolidate to Reporting Currency, a cross-currency consolidation is performed. The local currency results are consolidated into a Single Reporting Currency based on the historical and forecast exchange rates. Once translated into the reporting currency, common products are aggregated and output to a set table. For example, if the Process system identifier is uniquely identified by Sys_ID_Num 99999, results would be held as follows:
Table 7-29 Details of Consolidated Results
| Result Names | Results Tables | Calculations |
|---|---|---|
| Detailed Results | RES_DTL_99999 | |
| FSI_O_RESULT_MASTER, identified by Result_Sys_ID | The instrument is processed in its local currency and all results are accumulated in the local currency. | |
| Currency gain/loss is computed based on currency method defined for Product/Currency. | ||
| Consolidated Results | Cons_Dtl_99999 | Translates cash flows in each modeling bucket; consolidates across currencies. |
| OFSA_Consolidated_Master, identified by Result_Sys_ID |
The currency accounting method determines which exchange rates are used for the translation of each Financial Element. Typically, forecast exchange rates are used for the Temporal and Current Rate methods, and original exchange rates are used for the Historical Basis method. For the Temporal and Current Rate methods, some exceptions apply:
- Deferred Balances
Deferred Balances are balances that reflect prepaid amounts that are prepaid fees, amortized costs, premiums, or discounts. Because the cash flows associated with these balances have already occurred, there is no currency risk associated with them. Therefore, these financial elements are reflected at cost, at the exchange rate at the time of origination.
- Interest Accruals
The Standard Historical Interest Accrual Financial Element is reflected at the original exchange rate because the currency gain/loss account already reflects the change in interest due to currency. However, to calculate yields consistently with the average balance, a set financial element is calculated for the current basis interest accrual; this reflects the interest accrual based on the current bucket exchange rate.
- Gap Financial Elements
- Formula Results
Formula Result output is consolidated into reporting currency using the current bucket exchange rate, irrespective of the currency accounting method selected. Ensure associated currencies are selected for audit, in the ‘Exchange Rate’ section within the ‘Audit’ block of a process. If respective currencies are not selected for audit, or if the audit is disabled, the engine will use the actual exchange rate on As of date for consolidation.
Note:
The formula result output is consolidated using the current bucket exchange rate. Whereas Static and Dynamic Business output is consolidated using currency accounting method and financial elements. For more information, see the Currency Translation Methods for Financial Elements. Hence, the formula result in consolidated output, and Static/Dynamic business consolidated output may vary.For Consolidated Master results: Deferred balances are translated using the exchange rate in effect when the instrument was originated; all other balances are translated using the exchange rate in effect at the As-of-Date or future Start Date:
- As-of-Date Values use the actual exchange rate in effect on the As-of-Date.
- Future originations and Dynamic Start Date Values respectively use the forecast exchange rate in effect on the future origination date or Start Date.
If No Exchange Rate is found, the Cash Flow Engine logs an error message and sets the exchange rate equal to 1.