Residual Account on business unit, Consolidation

sneha

We are onNav 5.0 SP1. And, we use multicurrency.
I’m trying to understand the functionality behind Residual Account configuration on the business unit, G/L Account tab.

During the consolidation, when we import Closing-Rate balance sheet accounts that already have a balance from a prior period's consolidation, it may be necessary to adjust the opening balance. By using the Balance Currency Factor (Closing Rate) and Last Balance Currency Factor (Last Closing Rate) fields, the program checks whether there are any exchange rate differences between the last import and the current one. If there is a difference, the opening balance on the balance sheet accounts is adjusted to the applicable exchange rate for the balance sheet accounts. All exchange rate differences are calculated and posted afterward to the accounts for exchange rate gains and losses that are set up in the Business Unit table. A possible remaining amount is calculated for all the imported entries and posted afterward to the Residual account in the consolidated company.

From the above, I already understand about the closing rates, calculations and adjustments. But only thing that I wasn’t sure about was the residual amounts that are being posted to Residual account. What will be the possible remaining amount after the closing and opening balances are calculated and the differences are posted?

Some one could explain this. Thanks in advance.

jglathe

Hi sneha,

the residual is the accumulated effect of all roundings by posting date. There are several sources for rounding:

- prior-period exchange rate adjustment (the case you mentioned)
- exchange rate conversion due to the local currency of the business unit
- rounding due to a contribution of less than 100%.

It's similar to the Additional Currency Residual handling.

with best regards

Jens

sneha

Thank you Jens!

I thought the same it should be effect of all roundings by posting date. But, the residual account balance is huge. I drilldown to find the activities for certain periods. For some periods, the rounding amount of business unit is more than that business unit period activity.
For example, for Mar'2013 period, business unit activity is 100 Euros. When I run the consolidation, the conversion in consolidation entity shows the correct amount in $(approx:130). Whereas the in Residual amount I see the amount as $160. And the description of the entry shows as: 160 posted to residual account as of 03/31/13.
Accumulated rounding amount can be more than business unit period activity?

We always run the consolidation at 100%.

jglathe

Hi sneha,

:-k is it possible that you have accounts with "historical rate" exchange rate conversion? Or some other unusal combination of adjustment methods? These could cause an imbalance, which would show up on the residual account. The residual amount is calculated by adding up all amounts which are newly posted.

with best regards

Jens

sneha

Agree. By Navigating from chart of accounts, I can see the total amount posted to Residual Account. As we know it can be because of any adjustments. Can we see the break down for the total amount? For example, the total amount posted to Residual Account during March'2013 consolidation is $150. How to find out the system calculations for $150?

jglathe

Hi sneha,

I'm afraid not.

with best regards

Jens

markborges

Hi sneha,

I was wondering you ever found a reason for this huge differences on the residual account.

Thanks, regards,