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Description
This program translates amounts in local and transaction currency intocorresponding amounts in group currency.
According to business requirements, previously specified sets ofaccounts (basic sets) can be translated in various ways using variousexchange rates. Fixed assets, for example, must normally be valuatedusing historical exchange rates, balance sheet accounts must betranslated using a spot rate, and valuations of income statementaccounts are usually made in each period.
The following problem arises due to different translation keys:
Given that all accounts add up to zero in local currency, if eachaccount were then translated in the same way using the same exchangerate then this would be equivalent to multiplying each account by aconstant factor. The balance, now in group currency, would still bezero. However, if each individual account is valuated in a differentway the balance is not normally zero. This prevents correct balancingand means that clearing amounts must be posted.
Currency translation takes place in two steps. First all the accountsare uniformly valuated in a "reference translation" (which correspondsto the spot rate method of currency translation, as mentioned below).The abovementioned basic sets are then valuated using the appropriatespecific translation key and the currency exchange rate assigned tothem. The difference is formed from the results of these procedures.These translation diffences are assigned to certain FS items on setlevel and written straight to the database.
In addition, rounding differences usually occur during translation intogroup currency. These differences also prevent the balance fromequalling zero in group currency. They are assigned to accounts andwritten straight to the database.
16 periods can currently be analysed.
In some cases the use of a reference translation may be problematic(during some installations). For more information, see the section"Suppressing the Reference Method".
Historical Currency Translation
If AM is not used in conjunction with FI-LC to order to managehistorical group values, or if other historical values need to bemaintained in the database, then you can use GB11 to enter theacquisition year and acquisition period. Both are needed for historicalcurrency translation. The acquisition period does not need to beidentical to the posting period. It is rather used as a code to enter alonger or shorter period.
For each combination of acquisition year/acquisition period, an entrymust be made in table T884. The date then found in T884 refers directlyto the date in table TCURR.
Suppressing the Reference Method
If you do not want a reference translation to be performed, you canenter the spot exchange rate "*" in the entry screen. The currencytranslation diffence will then be determined through a comparison withthe group currency values already in the database.
Historical Translation via AM
If AM and FI-LC are installed, you can directly transfer historicalvalues from AM into FI-GL.Precondition
You need to maintain the following control tables (the mostimportant for the correct functioning of the program):
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