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Microsoft Dynamics NAV (Archived)

Maintaining two Books in NAV

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Posted on by Community Member Microsoft Employee

Hello Experts,

I'm just wondering if can map the following scenario in NAV.

My client wants to maintain two books in the system, one for financial reporting and one for Tax purpose. The functional currency of the system should be USD and the financial reporting would be in USD as well. Now for the TAX reporting they want to use COP[Columbian Currency] which is the local currency of the country. This can be fulfilled with the additional reporting currency option.

Now the issue comes :-

For financial reporting purposes - FX gains and losses on monetary assets and liabilities denominated in currencies different from the functional currency.  So, if we have a company in Colombia, and it is determined that the functional currency is the USD, then NAV must calculate FX gains and losses on monetary assets and liabilities denominated in currencies different from the USD.

For tax purposes – NAV must be able to keep books “as if” the functional currency is the local currency (COP).  This means that for this tax book, NAV must calculate FX gains and losses on monetary assets and liabilities denominated in currencies different from the COP.

Does anyone have come across such scenarios?? Appreciate your valuable advices.

Thanks

Ratheesh

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  • Suggested answer
    AJAnsari Profile Picture
    AJAnsari 5,754 on at
    RE: Maintaining two Books in NAV

    In NAV, you can use two currencies for reporting purposes. One is called the Local Currency (abbreviated as LCY) and this is the base currency of the system. A secondary reporting currency can also be defined, called the Additional Reporting Currency (abbreviated as ACY).

    In addition to this, you can use any / as many currencies as needed to record transactions in. Individual transactions can be shown in the transaction currency or the LCY. Off the top, I cannot remember for certain if they can also be reported in the ACY, but I believe that is not  the case.

    Financial reports can be generated in either the LCY or ACY. Gains / Loss reports will be in LCY for sure. When reporting the balance or change of a Gains / Loss account, I recall it essentially takes the amounts as shown in LCY and shows them converted to ACY based on the effective exchange rate between LCY a and ACY. (i.e., it won’t convert values from transaction currency to ACY and report gains / losses on that conversion).

    I hope this helps. If it does, please verify by clicking “Yes” next to “Did this answer your question?”

  • Community Member Profile Picture
    Community Member Microsoft Employee on at
    RE: Maintaining two Books in NAV

    We have had a similar situation few years back. It may sound stupid but it worked so you may consider it :) However this was a issue we have encountered in a small transactions company so it might not suit you.

    Create two different companies. Set the local currency's according to your needs. Add a functionality to original company documents or directly to setup, according to your needs. Define a job queue for the second company. In this job, call for a codeunit which can just copy the documents selected that copy option true entirely and post in second company with necessary changes on currencies and post with code. Use the tax reports on second company.

  • Hannes Holst Profile Picture
    Hannes Holst 5,767 on at
    RE: Maintaining two Books in NAV

    Hi,

    The financial "backbone" of NAV does support one local currency. This "backbone" (Chart of Accounts) represents normally the legal company structure that reports to the local authorities (e.g. taxes).

    All transactions (sales, purchases etc.) will be converted into the local currency when posting financial transactions (general ledger entries).

    FX gains and losses are posted into the finance-module once: When a transaction (Sales, purchase etc.) in a foreign currency is posted, NAV converts into the local currency (the Posting Date determines which Currency Exchange Rate is used).

    As it sounds to me, for your situation, I would modify each financial report individually to show USD/foreign currency. And I would setup COP as the local currency in which you maintain the Chart of Accounts.

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