How to Make PeopleSoft 9.2 Multi-Currency Work for You€¦ · • PeopleSoft software addresses...

Session ID:

Prepared by:

How to Make PeopleSoft 9.2

Multi-Currency Work for You

101460

@SpearMC

Millie Babicz

Managing Director

SpearMC Consulting

Agenda

• About SpearMC

• Multi-Currency Configuration

• Multi-Currency Journals

• Re-Measurement

• General Ledger Adjustments

• Reporting

• Multiple GAAPS

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About SpearMC

Your Presenter

Millie Babicz, CPAManaging Director

[email protected]

866-SPEARMC x802

www.SpearMC.com• ERP Implementation Specialist

at KPMG for 13 years before joining SpearMC in 2007

• PeopleSoft Financials, Financial Control and Reporting Expert

• Certified PeopleSoft v9.1 Financials

• 20 Years Experience in Project / Program Management

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About SpearMC

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Founded in 2004, SpearMC is a technology and professional services firm specializing in

PeopleSoft Financials and Supply Chain Management

PeopleSoft Human Capital Management and Payroll

Maximo Enterprise Asset Management

Oracle Business Intelligence

ERP Architecture and Application Development

Project and Program Management (PMO)

Change Management

ERP Training

Mobile Technology

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About SpearMC

Offices in Chicago, Denver, Oklahoma City, Phoenix, Seattle and San Francisco

We focus on local market delivery and capability development in line with industry focus areas unique to the regions we serve.

Our local and well-connected network of top-tier business analysts, technical leads, developers and project managers keep travel cost to a minimum.

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About SpearMC

Each member of our Leadership Team leverages over 20 years of experience in Technology, Financial and Business Transformation.

About SpearMC

Industry focus areas include:

• Energy

• Transportation

• Healthcare/Biotech

• Government

• Media/Technology

• Consumer Products

• Financial Services

• Higher Education

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About SpearMC

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Oracle Gold Partner since 2008: PeopleSoft Specialization Applications Reseller

Hardware Reseller

IBM Advanced Partner:

Multi-Currency Configuration

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Common Terms

• Currency Codes

– Pound Sterling (GBP)

– Mexican Pesos (MXN)

• Exchange Rates

• Market Rates (exchange rates, interest rates, stock price, etc.)

• Currency Rate Types (Average, Current, Historical, etc.)

• Base Currency (each BU must have one base currency)

• Foreign Currency (any currency that is not base currency

• Reporting Currency (any currency you use for reporting)


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Market Rate


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Loading Market Rates

• PeopleSoft comes delivered with standard currency codes,

however, if a particular code does not exist then:

‒ Insert currency into CURRENCY_CD_TBL

‒ Insert currency quotation method into CURR_QUOTE_TBL

‒ Insert market rate definition into RT_RATE_DEF_TBL

• Update Rates for existing currency code:

‒ Insert market rate for current effective period into

RT_RATE_TBL


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Loading Market Rates

Rate File

New Currency

CURR_QUOTE_TBL

RT_RATE_TBL

CURRENCY_CD_TBL

RT_RATE_DEF_TBL

NO

YES


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Currency Quotation Method• Indirect

‒ Determine whether you want the rates for a currency pair quoted indirectly.

‒ For example, in converting United States dollars (USD) to Swiss francs (CHF), an indirect quote would indicate that USD x.xxxx = CHF 1

• Direct

‒ Determine whether you want the rates for a currency pair quoted directly.

‒ For example, in converting United States dollars (USD) to Swiss francs (CHF), a direct quote would indicate that USD 1 = CHF x.xxxx. In this case, Swiss francs are quoted directly against the United States dollar


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Quotation Method


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Currency Precision Rounding

• Currency dictates the precision of monetary amounts.

• For example, United States dollar amounts have two digits to the right of the decimal and Japanese yen have none.

• PeopleSoft software addresses currency precision as follows:‒ PeopleSoft delivers currency sensitive amount fields with a standard length of

23.3 (23 digits to the left of the decimal point and 3 digits to the right of the decimal point)

‒ By default, PeopleSoft software rounds all currency sensitive amount fields to the currency precision of the associated currency. This action is a PeopleTools option that you can deactivate.

‒ All numbers on SQR reports are currency sensitive. For reporting with Crystal and PS/nVision, the display is equal to the field precision, but you can increase the number of decimals.

‒ The journal entry screen will show an error if a user enters more decimal places than specified on the currency code page


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Currency Precision

Currency precision ranges from zero decimal points to three

decimal points per ISO standard

The journal will be in error if more decimal places than

specified on the currency code page are entered


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Currency Triangulation

Cross currency triangulation allows you to convert two

currency pairs, which do not exist as standard pairs, using

a third currency as a reference


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Currency Controls

Controls that are defined for a ledger group override those

defined for a business unit, and controls selected for a source

override both a ledger group and a business unit.

• Business Unit

Establish Base Currency

Currency Balance Options

• Ledger Group

Rounding Adjustment Option

• Journal Source


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Business Unit


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Ledger


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Journal Source

Multi-Currency Journals

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GL Currency Mapping


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Update Currency Effective Date at Header Level


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Journal Line – Primary Ledger

• Adjust Amount or Rate for Primary Ledger (ACT_LOC)

• If you change either the Amount, Base Amount or Rate, you can have

the system calculate one of the three by changing the Calculate

value or just leave the System Rule default


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Ledger

• You can define multiple ledgers for various multi-national reporting

• Ledgers in Sync

‒ When you enter a two line journal entry for a ledger group that

contains two ledgers, the system creates two additional lines.


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Journal Line – Secondary Ledger

• Adjust Base Amount or Rate for Secondary Ledger (SEC_USD) to

update the translated values


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Keep Ledgers in Sync

• The following query shows journal lines generated for the two

ledgers in this example:

‒ ACT_LOC is the primary ledger

‒ SEC_USD is the translate ledger, which translates transactions

in real time

Multi-Currency Re-Measurement

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Revaluation• You may need to revalue the base currency of the balance sheet

accounts that you maintain in foreign currencies to reflect changes in

value due to fluctuations in exchange rates

• Revaluation process adjusts the base currency value of the account

balances by creating adjusting entries for the accounts being revalued.

• The process creates corresponding entries for any gain or loss that

results from the revaluation.

• Revaluation takes place at the end of each accounting period for all

Asset and Liability accounts prior to translation.

‒ Ledger: ACT_LOC (in this example)

‒ Timespan: BAL

‒ Rate Type: CRRNT


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Revaluation ExampleNote: Same $87.67 transaction is now worth $100.88


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Revaluation at Subsystem

• Re-measurement of gains/losses at ledger, customer and

vendor levels

• Accounts Payable

‒ The PS/AP Revaluation process finds all unpaid, posted

vouchers for the specified business units as of the specified

date whose transaction currency is not the same as the

base currency of the general ledger business unit.

‒ For each unpaid voucher, it uses the specified exchange

rate and calculates a revaluation amount.

‒ The accounting entry consists of an unrealized gain or loss

entry with a matching offset on the payables account.


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Translation• For reporting purposes, you can translate base currency balance of

foreign entity to your reporting currency.

• You can maintain a secondary ledger (SEC_USD) for real time translation at the effective CRRNT rate.

• Translation takes place at the end of each accounting period for all accounts after revaluation.

• Translation only occurs for Business Units with non-USD base currency.

• The process creates corresponding entries for any gain or loss that results from the translation.

‒ Ledger: SEC_USD (in this example)

‒ Timespan: BAL (Balance Sheet accounts) PER (Income Statement accounts)

‒ Rate Type: CRRNT (Balance Sheet accounts) AVG (Income Statement accounts)


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Translation Example

Multi-Currency GL Adjustments

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Scenario 1 - Adjust Original Base Amount

• Adjustment in Period 2

• Since the original transaction amount never goes to zero, you

will always have a “revaluation adjustment” from month to month


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Scenario 1 - Adjust Original Base Amount





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Scenario 2 - Adjust Translated Amount




• But now you will have revaluation for GBP and USD amounts


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Scenario 2 - Adjust Translated Amount




• But now you will have revaluation for GBP and USD amounts


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Scenario 3 - Adjust Original Transaction Amount

• Adjustment in Period 2 – using same rate

• Adjustment in Period 2 – using current rate

• You will have a temporary residual until “revaluation” is processed

Multi-Currency Reporting

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GL Currency Mapping


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Reporting from GL Ledger Table

• Transaction Amount (POSTED_TRAN_AMT)

‒ Can be in any currency code

‒ Serves as the foreign amount when the currency code is different then the base currency code defined for that Business Unit

• Base Amount (POSTED_BASE_AMT)

‒ Only one currency code can be defined for a Business Unit

• Posted Total Amount (POSTED_TOTAL_AMT)

‒ Any amount that is posted to Ledger, can be in foreign currency or base currency

‒ When used in reporting, you will always have to specify the currency code


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Ledger Example

• For multi-currency ledger reporting it is safest to use Posted Base Amt

• If you used Posted Total Amt, you always have to make sure to

designate the correct currency


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nVision Report

• Layout Tips

‒ Use Based Amount (POSTED_BASE_AMT) so you won’t

have to identify the currency

‒ Include all currency codes as nVision automatically defaults

to USD if not specified

Multiple GAAPS

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Multiple GAAPS

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Ledger Approach Book Code Approach

Local GAAP

Adjustments

CommonIFRS

Adjustments

Local GAAP

IFRS

Multi-GAAP Ledger

L = Local Book Code C = Corp Book Code B = Common Book Code

Transactions are posted to the respective ledgers. nVision is used to produce reports for Local GAAP and IFRS.

Single ledger holds transactions for all GAAPs; Book Code ChartField used to identify transactions; Ledger Code is used to produce the Local GAAP and IFRS reports.

CommonLocal Only

IFRS Only

Ledger Code - LOCAL

Ledger Code = IFRS

BUACCOUN

TALT

ACCT

Corp GAAP Local GAAP

Multiple GAAPS

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Ledger Approach

• The Ledger approach allows users to define different or multiple

ledgers to suit the organization’s structure.

• The user can have one ledger that addresses common

transactions.

• A second ledger that groups IFRS adjustments.

• A third ledger for entering local GAAP adjustments.

• The user can then create reports using nVision and Tree

Manager to group the ledgers as appropriate.

Multiple GAAPS

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Book Code Approach

• You can use Book Code to handle multiple GAAP requirements

within the same ledger.

• The Book Code ChartField can identify a transaction as either

local GAAP, IFRS or both.

• This allows items that affect both local GAAP and IFRS

simultaneously to be entered only once rather than duplicated

to each associated ledger.

• Users can then use Ledger Codes to define what transactions

(based on Book Codes) to use in their reports.

• This allows organizations to ensure consistency with

accounting and data gathering across the world, while at the

same time recording transactions in compliance with local

regulation.

Multiple GAAPS

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Book Code

• If you activate the book code, you must

specify a book code for each account value.

‒ You can attach these book codes to accounts as

attributes

‒ A unique account value must be created for each

book code

‒ Book code appears as a read only field on the

journal entry page

• Can override at time of Journal Entry

‒ The Allow Book Code Override option that is set

on the ChartField Account page

‒ Using this method, you can associate any of your

book codes with the same account value to record

related amounts in the same ledger

Multiple GAAPS

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Ledger Code

• Use this page to create ledger codes

• Assign them to the applicable book codes to define subsets that

segregate various accounting treatments of transactions

Multiple GAAPS

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Book Code Approach

• You can enter and maintain both a statutory (local) account value and a corporate (internal) account value at the detail transaction level within General Ledger, as well as within subsystems.

Questions?

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SpearMC Online Resources

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SpearMC Online Resources

• SpearMC online Tools & Resources can be

found at www.spearmc.com

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http://www.spearmc.com/

Thank You.

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How to Make PeopleSoft 9.2 Multi-Currency Work for You€¦ · • PeopleSoft software addresses...

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Transcript of How to Make PeopleSoft 9.2 Multi-Currency Work for You€¦ · • PeopleSoft software addresses...