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Consolidation for Opening Balances

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I am running group Consolidation where some entities have accounting currency different than consolidation entity currency. For Balance sheet accounts system is translating current year balances (Movement during the year @ current rate) however for opening balances of balance sheet accounts system is taking current rate for last year closing. e.g.

for a balance sheet account, its balance on 31/12/2019 (opening Balance for year 2020) is translated with the exchange rate of that day (31/12/2019) and only the movement of the year 2020 is translated with the exchange rate of 31/12/2020. Therefore, its final balance at 31/12/2020 is not correctly translated to the reporting currency.

Has anyone faced this issue and any solution or workaround for this issue?

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DavidDuke 50 on at

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Hi,

The way to address this is to run the General Ledger Foreign currency revaluation in the consolidation entity, after running the consolidation. This will revalue the year to date balance of each balance sheet account (i.e. including the opening balance) using the rate on the date of rate specified. Note, the process will only run for accounts configured for revaluation.

Regards,

David

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Ludwig Reinhard Microsoft Employee on at

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Hi Hazeel87,

A third party specialized consolidation tool might be something you want to look into.

The standard consolidation functionality has a couple of restrictions.

Best regards,

Ludwig

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Community Member on at

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Hi David,

If we have already run revaluation in respective entities then do we need to re-run again after performing consolidation as exchange rate will be same closing rate for B.S accounts?

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DavidDuke 50 on at

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Hi,

It depends on the specifics of your situation (specific version, currencies, parameters for consolidation etc.), but broadly speaking, the difference is that the revaluation done in the subsidiary entities was for the value in the accounting currency in those entities, whereas in the consolidation entity it is the value in the currency of that entity. Also, if the original problem was the opening balance for the balance sheet accounts, you would need to run the revaluation in the consolidation entity for it to revalue.

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Community Member on at

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Thanks David Duke. It worked fine. Appreciated

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Community Member on at

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Thanks David. Its working fine as mentioned however if i am performing consolidation through Management Reporter how can i translate my opening balances to latest closing rate?

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DavidDuke 50 on at

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If you're using MR with AX2012 or Financial reporting in D365 Finance, you can convert your opening balance or YTD balance at the closing rate, as follows.

Main account:

Set Currency translation type to 'Current'

Column structure:

Set Currency display to 'Translate to ???'

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Junaid Idrees on at

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Hi Hazeel,

I will suggest you to check the below link for better understanding on currency translation in order to use in MR:

cloudblogs.microsoft.com/.../

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Community Member on at

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Hi David,

Thanks for your prompt response. I have already done this setup and checked it however the opening balances are converted based on closing rate for last year and not current year. Like the opening balance for YTD/BB are translated based on 31 Dec 2019 closing rate in MR even with all these setups.

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DavidDuke 50 on at

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Hi Hazeel87,

What is your Report date and the date of the last exchange rate prior to that date?

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