Multi-Currency Processing

For each ledger, General Ledger maintains average balances in your selected ledger currency. The system also maintains separate average balances for each foreign currency you've used to enter transactions. The following section explains how General Ledger performs foreign currency conversion, revaluation, and translation when average balance processing is enabled. Caution: It is not recommended to enable average balance processing for journal-level and subledger-level reporting currencies. Doing so will incur additional overhead to maintain average balances in both the source ledger and its reporting currencies. If you enable average balance processing for your journal-level and subledger-level reporting currencies, average balances will be maintained similarly to how they are maintained for your primary or secondary ledgers. Each time a standard journal is posted in the source ledger, another journal will be created and posted for the reporting currency. General Ledger will then update the corresponding aggregate balances for both your source ledger and its reporting currency. For more information on Reporting Currencies, see: Overview of Reporting Currencies.
Conversion

When you enter a journal, General Ledger automatically converts any foreign currency amounts to your ledger currency. When you post journals, the converted amounts update your accounts' standard balances. At the same time, General Ledger updates the corresponding aggregate balances for both your entered (foreign) and converted (ledger) currencies. These balances are used to compute your average balances.
Revaluation

When you revalue a balance sheet account that is denominated in a foreign currency, General Ledger automatically creates a journal entry to record the unrealized foreign exchange gain or loss. When this journal entry is posted, General Ledger updates both the standard balance and the corresponding aggregate balance of the revalued account. These updated balances are factored into the calculation of the account's average balance.
Translation

If you have average balance processing enabled, and choose to translate your accounts for consolidation or reporting purposes, General Ledger will translate both standard and average account balances to a balance-level reporting currency you specify as the reporting currency during Translation. You can translate both balances separately or in a single translation run, as part of the month-end cycle.

General Ledger maintains translated balances in your balance-level reporting currencies for each day of an accounting period. When translating each day's average balances, the system multiplies the ledger currency average by the average of the daily conversion rates for the period, up to and including the current day. The table below shows an example: Averages of Daily Conversion Rates Example Daily Day Rate 1 2 3 : : 31 1.10 1.12 1.15 : : 1.17 Average of Daily Rates 1.100 1.110 1.123 : : 1.148 Primary Ledger Currency Average 1,000 1,000 1,000 : : 1,000 Translated Average Balance Maintained by the Balance-Level Reporting Currency 1,100 1,110 1,123 : : 1,148

Where necessary for specific accounts, you can use historical rates or amounts, rather than the averages of daily conversion rates. When you enter historical rates or amounts for an account:

You can specify separate values for standard and average balances, or you can use the same value for both. General Ledger uses the specified value to translate the related balances. The same historical rate or amount will be used to translate average balances for each day of the period.

Quarter and Year Average-to-Date Translations

General Ledger translates an account's quarter and year averages-to-date differently, depending on whether the daily average balances are translated using averages of daily conversion rates, or historical rates or amounts.

Averages of daily conversion rates- translate quarter and year averages-todate using averages of daily rates for all days in the quarter or year. For example, if the first quarter of a year includes January, February, and March, General Ledger will translate the quarter average-to-date balance for March 16th by multiplying the quarter average-to-date ledger balance by the average of all of the daily rates between January 1 and March 16.

Historical rates or amounts- translate quarter and year averages-to-date using the average of the historical rates or amounts for the appropriate periods, weighted by the number of days in each period.