JustConsolidate

SETUP

There are a few additional steps to cover in setup when foreign currency companies are involved. Under the Setup Configuration menu, you will see an option for 'CTA / Historical' which contains two additional steps to complete.

1. Select Account for Booking CTA (Currency Translation Adjustment)

• With the current method, JustConsolidate will calculate and book the CTA that results from translating the P&L and Balance sheet activity in a period. To ensure the system books CTA to the correct account, you simply need to select from the drop-down list the account you want to use to for recording CTA entries. Once selected, click the lock button to confirm the selection. Should you ever need to change the setting, simply click the unlock button to enable selection of another account.

2. Select Accounts to Translate at Historical Rates

• All assets and liabilities are translated at the ending exchange rate for a reporting period. However, certain transactions (AKA 'Historical Transactions') are recorded at the prevailing spot rate when the transaction occurred and not subsequently revalued.
• Based on user feedback, JustConsolidate utilizes a simplified approach to help users manage Historical Transactions; specifically, users designate the specific accounts (eg. Equity) whereby period activity is translated using the average rate for the period. Beginning balances in these accounts are not revalued every period.
• To identify accounts to translate at historical rates, select the foreign currency subsidiary from the drop list, select the account(s) and click the 'Lock Selection' button. Accounts can be added/deleted by unlocking and modifying as needed.

OPENING BALANCE SHEET WORKFLOW (OPTIONAL)

• If you are using the Opening Balance Sheet workflow for a foreign currency company, you will see an F/X rate entry box in the Review screen Journal Entry table. Simply enter the appropriate translation rate for the opening balance which would typically be the period ending rate for the period prior to the opening balance period selected. For example, an opening balance period of Jan-2021 would use an F/X rate as at 12/31/2020
• After entering the rate, click <Apply Rate> and you will see local currency balances translated to the home currency of the parent
• All balance sheet accounts are translated at the rate entered. You may need to modify some of the translated balances to account for historical exchange rate differences. In this situation, simply post the JE to the parent QBO company, then go into the parent QBO company, pull up the OBAL JE that posted for that company and modify the affected balances to correct for historical adjustments with an offset booking to your currency translation adjustment or gain/loss account as needed

CONSOLIDATIONS

F/X Rate Entry - prior to running a consolidation, you must enter the desired average and ending exchange rates for the accounting period and the prior period. Under the Consolidation menu, select F/X Rate Entry and select the desired accounting period. Simply enter the desired rates click to save. Rates are easily modified by re-entering and saving the change.

Translation Methodology - when you are in the review or confirm work flows when running a consolidation, you will see in the display table the account balances that were extracted for the subsidiary in both the home currency of that company and what the balances are when translated into the currency of the parent/consolidation company. The translation impacts are separated by beginning balance and period activity.

Beginning Balance Translation - the beginning balance for all balance sheet accounts (other than accounts designated during setup as 'Historical' is revalued at the new ending rate for the accounting period. The beginning balance adjustment is displayed and posted separate from the period activity to support analysis and/or note disclosures for cash flow statements. 

Period Activity Translation - the period activity for all P&L and Historical Balance Sheet accounts is translated at the average rate for the period. All non-historical Balance Sheet accounts are translated at the period ending rate.

Currency Translation Adjustment - JustConsolidate automatically calculates any required booking for currency translation adjustment and posts to the CTA account designated in setup.