Historical, closing or average rates

Translate each account at the rate that suits it.

Find a partner Back to Financial consolidation

What it does

Historical: the rate of the journal entry's date. Closing: the rate of the last day of the period. Average: a rate you set in the average-rates window. Set per account.

When you need it: Balance-sheet accounts at the closing rate, profit and loss at the average.

How it works

Translation only happens for a company whose local currency is not the consolidation currency. Rates are always read from the consolidation company.
In each subsidiary, open the "Chart of Accounts" window and choose a "Consolidation Translation Method" for each G/L account. "Historical Rate", the default, uses the rate of the day the journal entry was posted.
"Closing Rate" uses the rate of the last day of the period you consolidate: for a run covering January, the rate of 31 January.
"Average Rate" uses a rate you enter yourself. In the consolidation company, open Administration › Exchange Rates and Indexes, choose "Define Average Rates" and type an "Average Rate" for each currency.
When the run translates the balances, differences are booked to the gain and loss accounts named in "Consolidation Accounts Setup", and rounding differences to its "Residual Account".

Set it up

The method is set in every subsidiary, account by account. To change a block of accounts at once, open the "Define Account Consolidation Translation Method" window under Administration › Setup › Intercompany, choose a "From Account" and "To Account" range, pick the method and choose "Update". The average rates and the gain, loss and residual accounts are set only in the consolidation company. The administration console's "Copy Intercompany Setups" has a step that copies account classification and translation method settings from one company to others.

Good to know

The method belongs to the account, not the company, so balance-sheet and profit-and-loss accounts of one subsidiary can use different rates.
The "Define Average Rates" window holds one rate per currency, listed from the currencies set up in SAP Business One.
If a company's "Consolidation Source" is "System Currency", Intercompany assumes the system currency already equals the consolidation currency.
Every branch and consolidation company must hold the same set of currencies.