Post on 17-Jan-2016
Understanding Multicurrency
Presented By: Ian Richardson BA CPA CGA
Understanding Multicurrency
AccountsReceivable
Euro
ReportingNeeds
ForeignSubsidiary
ForeignCurrency
Journal Entry
AccountsPyable(USD)
AccountsPayable
(Remimbi)
BankAccount
(USD)
AccountsReceivable
(USD)
Multi Currency
Understanding Multicurrency
AccountsReceivable
Euro
ReportingNeeds
ForeignSubsidiary
ForeignCurrency
Journal Entry
AccountsPyable(USD)
AccountsPayable
(Remimbi)
BankAccount
(USD)
AccountsReceivable
(USD)
Multi Currency
Understanding Multicurrency
Multi Currency
Understanding Multicurrency
Agenda
Setup Transactions Inquiry / Balancing Revaluation Reporting
Understanding Multicurrency
•Currency creation•Z-XX come with GP•Set currency symbol•Seperators•GL accounts (if you want different accounts per currency)
Setup System
Understanding Multicurrency
•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
Understanding Multicurrency
•Exchange Table•Set multiply or divide•Set default•Exact or look forwards or backwards
•Rate Variance
Setup System
Understanding Multicurrency
•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
Understanding Multicurrency
•Multicurrency Access•For both the currency and the exchange rate
Setup System
Understanding Multicurrency
•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
Understanding Multicurrency
•Rate Types•Tie the exchange table with the rate type selected in the Multicurrency setup window
Setup
Financial
Understanding Multicurrency
•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
Understanding Multicurrency
•Currency Account Update•Quickly set account currency information for ranges of accounts
Setup Cards
Understanding Multicurrency
•Allow batch edit listings and posting journals to show multicurrency information by checking the box in posting set up
Setup
Posting
Understanding Multicurrency
Demo 1Setup
Understanding Multicurrency
•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
Understanding Multicurrency
•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
Understanding Multicurrency
•Override the rate on a bank transfer to use the rate of your foreign currency purchase or sale
Transactions
Understanding Multicurrency
• Subledger transactions display in originating currencies
• SOP and POP can switch
Transactions
Understanding Multicurrency
•Distributions for these show both functional and originating currency
Transactions
Understanding Multicurrency
•For journal entries use the view menu to see transactions in their originating currency.
Transactions
Understanding Multicurrency
•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
Understanding Multicurrency
•Notice that the dollar amounts are still denominated as C$ (from currency setup)
Transactions
Understanding Multicurrency
•Changing the view we get the actual US entry that was entered
Transactions
Understanding Multicurrency
Demo 2Journal Entry
Understanding Multicurrency
•The exchange rate has likely changed between when a transaction was originally entered and when it gets paid
Transactions
Understanding Multicurrency
•The system will automatically calculate the gain loss difference
Transactions
Understanding Multicurrency
Demo 3Apply Docs
Understanding Multicurrency
•Change the view to originating to see foreign currency transactions in their original currency
Inquiry
Balancin
g
Understanding Multicurrency
•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
Understanding Multicurrency
•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
Understanding Multicurrency
•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
Understanding Multicurrency
•Revaluations will not generate the correct equivalent ending balance until these functional currency transactions are removed
Inquiry
Balancin
g
Understanding Multicurrency
•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
Understanding Multicurrency
Demo 4 Inquiry
Understanding Multicurrency
•Revaluation can be done at both the general ledger and the subledger level
Revalution
Understanding Multicurrency
• Enter a document cut off to ensure that you are not revaluing transactions in the next period
Revaluation of
Subledger
Understanding Multicurrency
• 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
Understanding Multicurrency
Understanding Multicurrency
Understanding Multicurrency
Understanding Multicurrency
• Print report only for a preview of the revaluation
Revaluation options
Understanding Multicurrency
• Realized or Unrealized gain / loss• Only Unrealized
allows for reversing entries
Revaluation options
Understanding Multicurrency
• 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
Understanding Multicurrency
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
Understanding Multicurrency
• If applicable enter restrictions to identify accounts to revalue
Revaluation Options
Understanding Multicurrency
• Not entering a restriction will result in all accounts marked for revaluation being considered for revaluation
Revaluation Options
Understanding Multicurrency
• After the revaluation the inquiry screen should match the month end exchange rate
Revaluation
Understanding Multicurrency
Demo 5 Revaluation
Understanding Multicurrency
• 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
Understanding Multicurrency
• The Currency Translation Type determines which rate from the set up window to use
Reporting
Understanding Multicurrency
• Management Reporter column formats make use of currency display and currency filters
Reporting
Understanding Multicurrency
• Currency Display determines which currency amounts in that column are displayed in
Reporting
Understanding Multicurrency
• 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
Understanding Multicurrency
• 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
Understanding Multicurrency
Understanding Multicurrency
Demo 6 Reporting
Understanding Multicurrency
Questions?