Consolidation, exchange rate

kiyac

Balance sheet account
=================
May I know is there any setting can obtain this result "consolidated balance sheet account balances reflect the closing rate?"

For example
Parent company LCY = USD, Subsidary company = RMB,
Closing rate at Jan : 1USD = 7.8 RMB
01-Jan-09 to 31-Jan-09
780 RMB ==> 100 USD after consolidation (account type : Asset)
Closing rate at Feb: 1USD = 7.9 RMB
01-Feb-09 to 28-Feb-09
New transaction on Feb 790 RMB ===> 100 USD after consolidation
While the balance as of 31-Jan-09 also need to reflect the update exchage rate
ie The USD balance = (790+780) / 7.9 = 198.73
Thus Cr 1.27 Dr unrealized gain / loss 1.27


Income statement account
====================
Income statement account will use the parent companies's consolidation period average exchange rate for transalation, what is the setting can do that?

SD-JR

Hi

On the consolidation tab of the g/l accounts you can use.

For balance sheet scenario suggested - use composite rate
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.

For income statement accounts - use average rate (manual0 and you will need to define this by business unit on posting
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.