Understanding Multicurrency Presented By: Ian Richardson BA CPA CGA.

Understanding Multicurrency

Presented By: Ian Richardson BA CPA CGA


AccountsReceivable

Euro

ReportingNeeds

ForeignSubsidiary

ForeignCurrency

Journal Entry

AccountsPyable(USD)

AccountsPayable

(Remimbi)

BankAccount

(USD)

AccountsReceivable

(USD)

Multi Currency


Multi Currency


Agenda

Setup Transactions Inquiry / Balancing Revaluation Reporting


•Currency creation•Z-XX come with GP•Set currency symbol•Seperators•GL accounts (if you want different accounts per currency)

Setup System


•Exchange Table•Rate Frequency; how often will you set the exchange rate•Days to Expire•Only available on Miscellaneous

•Frequency None will not set an expiration date

Setup System


•Exchange Table•Set multiply or divide•Set default•Exact or look forwards or backwards

•Rate Variance

Setup System


•The default expiration date will be calculated based on the frequency you selected for the exchange rate table ID in the Multicurrency Exchange Rate Table Setup window. If None is the frequency for expiration, an expiration date will not be displayed when rates are added to the exchange rate table.

Setup System


•Multicurrency Access•For both the currency and the exchange rate

Setup System


•Multicurrency•Set Functional Currency•Set Reporting Currency•These likely will be the same but they can be different

•Add Rate types if you wish•Default Transaction Rate Types•Not marked as required fields but are.

•Allow Rates to be used without adding to the rate table?•Currency Translation•Used by Management Reporter

Setup

Financial


•Rate Types•Tie the exchange table with the rate type selected in the Multicurrency setup window

Setup

Financial


•Account Currencies•Mark that an account can use the foreign currencies•Identify accounts that should revalue, and how•Set translation type for reporting

Setup Cards


•Currency Account Update•Quickly set account currency information for ranges of accounts

Setup Cards


•Allow batch edit listings and posting journals to show multicurrency information by checking the box in posting set up

Setup

Posting


Demo 1Setup


•The system will use the document date / transaction date to determine the exchange rate to use•You can choose to enter a different rate if you wish

Transactions


•If you choose to change the rate and have marked to allow to use rates without adding to the table you can choose continue to not add the rate

Transactions


•Override the rate on a bank transfer to use the rate of your foreign currency purchase or sale

Transactions


• Subledger transactions display in originating currencies

• SOP and POP can switch

Transactions


•Distributions for these show both functional and originating currency

Transactions


•For journal entries use the view menu to see transactions in their originating currency.

Transactions


•This is particularly important in journal entries as if you leave the view as functional and change the currency to USD you are making a journal entry for the Canadian equivalent of

Transactions


•Notice that the dollar amounts are still denominated as C$ (from currency setup)

Transactions


•Changing the view we get the actual US entry that was entered

Transactions


Demo 2Journal Entry


•The exchange rate has likely changed between when a transaction was originally entered and when it gets paid

Transactions


•The system will automatically calculate the gain loss difference

Transactions


Demo 3Apply Docs


•Change the view to originating to see foreign currency transactions in their original currency

Inquiry

Balancin

g


•GL summary inquiry is in functional currency•It cannot be changed to originating•Instead click the currency button•Preselecting a month will open that particular month

Inquiry

Balancin

g


•Select the period and then amounts radio button•Period balance will show the ending balance for the period in the originating currency

Inquiry

Balancin

g


•If you are looking at an account that should ONLY have foreign currency transactions in it there should be no balance in the total functional currency field

Inquiry

Balancin

g


•Revaluations will not generate the correct equivalent ending balance until these functional currency transactions are removed

Inquiry

Balancin

g


•Keep in mind a bank reconciliation is not balanced until it has also been compared to the GL•In this case the USD bank rec will need to balance to $75 USD

Inquiry

Balancin

g


Demo 4 Inquiry


•Revaluation can be done at both the general ledger and the subledger level

Revalution


• Enter a document cut off to ensure that you are not revaluing transactions in the next period

Revaluation of

Subledger


• Be aware that revaluation may not occur if transactions have apply records; even after the cut off date• Cut off date has to

be before or equal to the posting date

Revaluation of

subledger


• Print report only for a preview of the revaluation

Revaluation options


• Realized or Unrealized gain / loss• Only Unrealized

allows for reversing entries

Revaluation options


• Reversing transaction• If you post reversing transactions for

unrealized gains and losses amounts created during the revaluation, the unrealized gain/loss revaluation amounts won’t update the original transactions. However, distributions will be created in the subledger and in the General Ledger. If you post revaluation transactions and didn’t select to reverse revaluation transactions, the revaluation amounts will update the original transactions. Distributions also will be recorded in the subledger and in the General Ledger.

Revaluation options


Reversing Entry Non Reversing Entry

The net loss of $3 is the same in both cases but you can see how the revaluation decision can affect a particular reporting period

Reversing Entry Non Reversing Entry

USD CAD USD CAD

Original invoice Oct 1 at 1.30 100 130 Original invoice Oct 1 at 1.30 100 130

Month End at 1.35 100 135 Month End at 1.35 100 135

Unrealized Loss 5 Unrealized or Realized Loss 5

Nov 1 Unrealized Gain 5 Payment made at 1.33 200 133

Payment made at 1.33 100 133 Realized Gain 2

Realized Loss 3


• If applicable enter restrictions to identify accounts to revalue

Revaluation Options


• Not entering a restriction will result in all accounts marked for revaluation being considered for revaluation

Revaluation Options


• After the revaluation the inquiry screen should match the month end exchange rate

Revaluation


Demo 5 Revaluation


• Management Reporter looks to multicurrency set up to determine the exchange tables to use

• Typically;• Balance Sheet accounts

would use a spot rate• Income Statement

accounts would use an average rate

Reporting


• The Currency Translation Type determines which rate from the set up window to use

Reporting


• Management Reporter column formats make use of currency display and currency filters

Reporting


• Currency Display determines which currency amounts in that column are displayed in

Reporting


• Currency filter makes the column only display transactions that were originally entered in that currency.

Reporting

Understanding Multicurrency`

• Allows you to show US transactions at their original amount, the US amount at the month end exchange rate, or their Canadian equivalents

Reporting


• Adding a Euro exchange table allows for financial reporting in Euro’s when non of the transactions were entered in Euros and neither the functional nor reporting currency is Euros

Reporting


Demo 6 Reporting


Questions?

Understanding Multicurrency Presented By: Ian Richardson BA CPA CGA.

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Transcript of Understanding Multicurrency Presented By: Ian Richardson BA CPA CGA.