Financial translation is the process of translating financial data into reporting currency. In addition to default translation done from entity’s default currency to its parent’s currency during the consolidation process; translation may be needed when you are reporting to a currency. When you do a translation, the entity you select and all its descendants get translated without any entity consolidation or aggregation.
Any input currency which has reporting currency enabled can be used for reporting.When you do a translation, the entity you select and all its descendants get translated without any entity consolidation or translation.
By default, accounts use the standard translation method with the default exchange rates. FCCS support two exchange rates – Average and Ending. Average rates are used for Flow type accounts like Income and Expense and Ending rates are used for Balance type accounts like Assets and Liabilities.
The translation process uses the PVA (Periodic Value Average) method for Flow accounts, and the VAL (Value at Ending exchange rate) method for Balance accounts.
PVA method retrieves the periodic value for an account and multiplies that by the Average Exchange rate for that period to obtain the translated amount for the current period.
YTD trans = Curr Period Trans value + Prior period YTD Trans value
VAL method retrieves the YTD value in an account and multiplies that by the Ending Exchange rate to arrive at he translated value for Balance type accounts.
Below video explains exchange rates used in FCCS and translation methods supported.