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Hi,
In Business Central, I have a company with local currency = BRL and all the transactions are being made only in BRL. I wanted to set up Additional Reporting Currency in USD. I got that we can enter Exchange Rates in Currency- > Process->Exchange Rate Table . However the rates added here are day wise rates i.e Historical Ones.
How can I enter Average Rates and Monthly Rates in this company
Note: I wanted to achieve this in same Company and not in Consolidated Company way.
Please advise.
Thanks in advance!
Can you set BC to automatically calculate the monthly average or do we need to manual calculate ourselves and enter monthly? MSFT doc does refer to average rates as "Average Rate (Manual)". I can't find good resources or documentation on how this actually works. Appreciate any insight.
[/quote]Business Central will not calculate the monthly average rate. You will have to do that yourself.
Can you set BC to automatically calculate the monthly average or do we need to manual calculate ourselves and enter monthly? MSFT doc does refer to average rates as "Average Rate (Manual)". I can't find good resources or documentation on how this actually works. Appreciate any insight.
Steve,
Thanks for the help. Got it working!
Bhagyashree,
Here is a good overview and what you should enter:
Average Rate (Manual) - the average rate for the period to be consolidated. You calculate the average either as an arithmetic average or as a best estimate and enter it for each business unit.
Closing Rate - the rate which prevails in the foreign exchange market at the date for which the balance sheet or income statement is being prepared. You enter the rate for each business unit.
Historical Rate - the rate of exchange for the foreign currency which prevailed when the transaction took place.
Composite Rate - the current period amounts are translated at the average rate and added to the previously recorded balance in the consolidated company. This method is typically used for retained earnings accounts because they include amounts from different periods and are thus a composite of amounts translated with different exchange rates.
Equity Rate - similar to Composite. The posting of the differences will be to separate G/L Accounts.
Thanks,
Steve
Steve,
So since BC will convert average rate & Monthly automatically how will BC differs the Accounts as Historical/Average/Monthly. Is it the consolidation Translation Method Method on Account only or anything else?
Bhagyashree,
When I need to load historical rates, I normally will enter them for the 1st Day of the Month and Last Day of the Month. BC will use the rates to calculate the average, monthly.
Thanks,
Steve
Hi Steve,
Thanks for the detailed Explanation.
I understood the steps to done in Consolidation Company. The explanation is perfect and works for Consolidation Company.
But is there any way to set Accounts Average/Monthly Rates without creating Consolidation Company.
Actually I have Migrated legacy data in Currency BRL and wanted to setup Additional Reporting Currency in USD. Hence I got some Historical Rates from legacy system and wanted to set up in Business Central which would convert BRL to USD( Just setting up Additional Currency)
Eg:
BRL-US-HIST Z-US$ 9/14/2009 2.084437
BRL-US-HIST Z-US$ 12/30/2009 1.974848
BRL-US-HIST Z-US$ 12/31/2009 1.919122
BRL-US-AVG Z-US$ 1/1/2009 1.919122
BRL-US-ME Z-US$ 1/1/2009 1.751129
I can enter Historical Rates in Currency Exchange Table, but how about Average & Monthly. And how Business Central would different the Rate Types if I don`t use Consolidation Translation Method Field, because I guess this field is solely made for mapping in Consolidation Company.
Please correct me If I am wrong.
Hello,
Are you trying to add these rates for Consolidation Translation Method reporting per Chart of Accounts?
The key with foreign currency consolidation is that you must make sure that the Manual/Average Rate (Used for Income Statement), Last Closing Rate, and Closing Rate (both used for Balance Sheet Accounts) on the Business Unit are correctly set prior to the consolidation. If the company is using Historical Rate Type on the account, then it will look at the currency Table for the date of the exchange rate closest to the transaction Posting Date in the subsidiary.
Just to kind of cover the flow. Typically, I would presume that monthly consolidations are completed. Therefore, as you enter the monthly date range to be consolidated, the system will complete the following:
1. For Balance Sheet Accounts set to Closing Rate in the Subsidiary, take the Net Change in Subsidiary Currency balance for the monthly period * Closing Rate as the first entry keeping Debit Balance and Credit Balance consistent.
2. For Balance Sheet Accounts set to Closing Rate in the Subsidiary related to the end balance of the previously consolidated period, the system will create an entry to adjust the Debit Balance and an entry to adjust the Credit Balance to equal the new Closing Rate value by taking the difference between Last Closing Rate and Closing Rate value.
3. For Income Statement Accounts, take the Net Change in Sub Currency * Manual/Average Rate on the Business Unit Card.
4. Note: No Adjustment is made to Income Statement Account balance from previous period because an Average/Manual rate is used for each period
5. Historical – take Sub Currency Amount * the specific Currency Exchange Rate closest to the Date of the original transaction in the subsidiary. Balance is not adjusted to the latest exchange rate value.
6. Composite and Equity – similar to historical, although the value can be made up of different exchange rates, particularly with Retained Earnings because of the nature of the entries posted to the account. The key is that no adjustment of prior period to current period exchange rate is completed.
7. Finally, balancing entries are created to the Exchange Rate G/L accounts on the Business Unit > G/L Accounts Tab to manage the different exchange rates and amounts to keep Debits and Credits in balance by subsidiary.
The above is the flow of transaction calculations.
The Consolidation Documentation for multiple companies can be found at the following:
docs.microsoft.com/.../finance-consolidated-company-reporting
Hope this helps.
Thanks,
Steve
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