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Tools for Models with Multiple Currencies

If data in your instance rolls up to multiple levels with different currencies, or you simply need to manage multiple currencies in planning and reporting, consider using these tools to help you with issues around currency translation.

Constant Currency Reporting

Use virtual versions to create constant currency reports.

Exchange rates fluctuations can make data variances look better or worse based on favorable or unfavorable exchange rates rather than the actual performance metrics. In accounting terms, constant currency eliminates exchange rate fluctuations when analyzing variances. You get a picture of your business performance without the affects of exchange rates.

See Constant Currency Reporting and Consolidation Versions.

Cumulative Translation Adjustment

Use CTA to assure that your balance sheet is in balance after currency translations have occurred. 

Balance sheet accounts, such as Asset and Liabilities, generally use End-of-Period exchange rates. However, some accounts in the Equity section of the balance sheet use average exchange rates for the period. This causes the balance sheet to fall out of balance after the currency translation takes place. When you enable CTA, it creates a system account (Cumulative Translation Adjustment by default -- you can change the name).  This account is a child account of your Equity account. It has a predefined formula that calculates the difference between the exchange rate types. 

See Currencies.

Currency-Tagged Splits for Initial Balances (CTS)

Use CTS to seed your initial balances in multiple currencies for any and all leaf levels to avoid using historical exchange rates.

If data in your instance rolls up to multiple levels with different currencies, enter the balance for each currency as a split for each currency. For all subsequent periods, at each level the value displays in that level's currency. 

See Currency-Tagged Splits for Initial Balances.

Weighted-Average Translation Accounts (WAT)

Enable the Weighted-Average Translation account setting to convert currencies in cumulative accounts that use data from periodic accounts.

This account setting works with a master formula. The master formula pulls the data from a periodic account, such as Net Income, into a cumulative account, such as YTD Net Income on the balance sheet. Weighted-Average Translation then converts the currencies on the delta at the average periodic exchange rates. Take it further and use Reset Balance to have your cumulative account stop accumulating and reset to zero at periodic intervals. For example, your YTD Net Income can reset to zero at the beginning of the new year. Use Balance Transfer at Reset to automatically transfer the balance at the time of reset to another account, such as Beginning Retained Earnings.

See Weighted-Average Translation Overview and Create Weighted-Average Translation Accounts and Weighted-Average Translation Walkthrough.

User-Defined Currencies

Use user-defined currencies to create custom currencies with different exchange rates. 

Create a unique name, description, and alpha-numeric code for your custom currency. Enter your own exchange rates and then use it to plan, forecast, budget and consolidate.

See Add or Edit Currencies.

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