Foreign Currency Issues

Each unit is designated a currency type, as well as exchange rates that are used to convert the unit's local currency information to reporting currency. Enter 1 for the exchange rate if the local and reporting currency are the same currency.

In converting currency, there are several potential issues that can occur. The Pre-Tax Book Income (PTBI) provided may be converted at different exchange rates. On a unit basis, the PTBI policy can be selected so that the correct exchange rate is used to convert. The interplay of the Weighted Average and Spot rates may require that a Currency Translation Adjustment (CTA) be posted to account for the difference in rates. The system automatically posts the CTA as an equity adjustment to the deferred tax asset/liability.

There is only one reporting currency concept in the system. This allows the combination of units in sub-consolidated or consolidated reports in the reporting currency view. The local currency view of the report may not make sense unless all units have the same currency.