# Translation reserve workbook

> This free Excel workbook works out the month's movement in the translation reserve for up to five foreign subsidiaries. You enter the opening net assets, the profit and three rates, and it shows how each part of the movement arises, with a check that the result ties. A worked example is filled in.

Source: https://finconsol.com/blog/resources/translation-reserve-workbook/ (updated 28 October 2026)

| Subsidiary | Opening net assets | Opening rate | Closing rate | Profit | Average rate | Movement (GBP) |
| --- | --- | --- | --- | --- | --- | --- |
| Palmridge Hospitality LLC (AED) | 12,000,000 | 0.2010 | 0.2040 | 1,905,000 | 0.2025 | 38,858 |

*The worked example in the workbook, September 2026*

## How to use it

1. **Enter the opening net assets** and the month's profit in the [subsidiary](/blog/glossary/subsidiary/)'s own currency.
2. **Enter the three rates:** the opening rate (last month's [closing rate](/blog/glossary/closing-rate/)), the closing rate and the [average rate](/blog/glossary/average-rate/) for the month.
3. **Add any dividend or new capital** with the rate on that date. Leave these blank if there was none.
4. **Read the movement and the check.** The check column should be 0 for every subsidiary.

## Who is it for?

Group accountants who translate foreign subsidiaries and want to see why the [translation reserve](/blog/glossary/translation-reserve/) moves. It handles up to five subsidiaries in one sheet. Once a group has many subsidiaries and months to carry forward, [Finconsol works out the reserve for every subsidiary](https://finconsol.com/multi-currency-consolidation/) when the rates are loaded.

## Questions

**What does the workbook calculate?**

For each subsidiary it works out the movement in the translation reserve for the month: the opening net assets at the change between opening and closing rates, plus the profit at the change between the average and closing rates, plus any capital or dividends at the change between the rate on their date and the closing rate.

**Which standard does it follow?**

IAS 21: assets and liabilities at the closing rate, income and expenses at the average rate, and the difference to a reserve in equity. It does not cover a subsidiary in a [hyperinflationary economy](/blog/glossary/hyperinflationary-economy/).

**Why is the profit translated twice?**

The profit is put into the income statement at the average rate, but it sits in net assets that are translated at the closing rate. The difference between the two rates on the profit is part of the month's movement.