below, these settings must only be dealt with in the Subsidiary Company's (ies') Chart of Accounts.
Automatic: The Automatic option is provided for compatibility with versions of Navision Financials previous to 2.01. The system will automatically use conversion for Balance Sheet and Income Statement Accounts based on the Current Rate and Average Rate. On the Periodic Activities | Consolidation | Business Units screen, there is the Exchange Rate option button.
Consolidated financial statements will be in the currency used by the parent company, so restatement of the other currency is required.
The key elements of currency translation will be discussed through a hypothetical case study.
There are three exchange rates that Microsoft Dynamics NAV uses when consolidating the financial statements of business units if the financial statements are in a foreign currency.
They are: Average Rate (Manual), Closing Rate and Last Closing Rate.
Typically, Average Rate (Manual) is used for income statement accounts, and Closing Rate is used for balance sheet accounts.
For more information, see How to: Enter Basic Information for Consolidated Companies.
The way to do this prior to AX 2012 R2 CU7 and AX 2012 R3 was to (1) do consolidations and eliminations in AX (2) run consolidating MR reports (3) make any changes in AX, reconsolidate, and re-run reports.
While this is common and still works, this blog post is to discuss pros and cons of leveraging new capabilities in AX2012 R2 CU7 and AX 2012 R3 to cut out AX consolidations entirely.
Don’t get lost in translation in accounting for foreign currency Here’s a refresher on the key elements of currency conversion for financial statements related to business done in other countries.
November 6, 2014 Accounting for currency translation is the result of a company having a branch or other operation that prepares its financial statements in a currency other than the currency of the parent company.