Revalue Balance Sheet in NAV

yogeshnpatel

Let’s say you have a Parent company (USD based) and the company is called “Parent Co”. There is a Netherlands Subsidiary for the company (Euro based) called “Child Co.” We consolidate Child Co. into Parent Co. every month and keep in mind that the consolidation only brings in the differences in the account for that one month. Let’s say we purchased an asset of 1.2 million Euro’s on January 1, 2009 and it has a 12 month life and we depreciate it straight line so essentially you are depreciating 100K euro’s every month. At the end of the year, the asset is fully depreciated and off the balance sheet in Child Co. but take a look below to see what happens in Parent Co.

So the question is – how do you revalue historical balance sheet transactions in NAV so that you don’t have this scenario happening without having to reconsolidate for the whole year every month? This becomes really a big issue if you start factoring in that you have assets with lives of more than a year in Child co.. Can anyone help, please?

ssingla

I don't remember (I did this in my first implementation and never since) but to the best of memory and understanding : Current period depreciation will be posted on the current period exchange rate but the accumulated depreciation will be posted on the historical rate i.e. the original exchange rate at the time of acquisition of asset. The difference will be posted to a account defined in Currency (I don't remember the field name).