Which exchange rate is used for which figure
Each month, a foreign company's balance sheet is translated at the closing rate, its profit and loss at the average rate and its equity at historical rates. Finconsol suggests closing and average rates from the European Central Bank's reference rates, and an administrator can type over any of them. Every change to a rate is recorded in the change log.
The rate for each figure
| Figure | Rate | Where it is set |
|---|---|---|
| Assets and liabilities | The closing rate for the month | Exchange rates screen |
| Income and expenses | The average rate for the month | Exchange rates screen |
| Equity, such as share capital | The historical rate | Historical rate column on Account mapping |
If no historical rate is entered for an equity account, Finconsol uses the rate on the date of its first posting, or else the closing rate, and flags it on the balance sheet and on the Close screen.
The difference these rates make is the translation reserve. How the translation reserve appears explains it.
Suggested rates
Finconsol suggests closing and average rates from the European Central Bank's reference rates. The closing rate is the rate on the last trading day on or before the month end. The average rate is the average over the month's trading days. A rate between two currencies other than the euro is worked out through the euro.
On the Exchange rates screen, choose Fill missing rates from the ECB to fill the gaps. Where there is no published rate to work from, the rate is left empty for you to enter.
Typing over a rate
An administrator can type over any rate. A rate you typed is never changed by a later suggestion. Each change is recorded in the change log with the old value beside the new one. A rate in a closed month cannot be changed until the month is reopened.
One reporting currency
Each group reports in one currency, chosen as the reporting currency in Settings. Every company keeps its books in its own currency and is translated into it.