Setup and Consolidation of Foreign Currency Subsidiaries : JustConsolidate

JustConsolidate is designed to handle foreign currency subsidiaries. If you have one or more foreign currency entities in your structure, this article covers the additional setup steps and workflow behaviors you need to be aware of.

Setup

When foreign currency entities are involved, there are two additional setup steps to complete. Both are found under CTA & Historical in the Setup & Configure menu.

1. Select an account for booking CTA (Currency Translation Adjustment)

When translating a subsidiary's P&L and balance sheet activity each period, JustConsolidate automatically calculates the resulting Currency Translation Adjustment (CTA). To make sure it posts to the right place, you need to tell the system which consolidation entity account to use.

To set it up:

From the drop-down list, select the account you want to use for recording CTA entries.
Click Lock to confirm your selection.

If you ever need to change the account, click Unlock and select a different one.

For Xero users

Create an equity account of your own for this purpose. Don't use Xero's Realised Currency Gains or Bank Revaluations accounts — Xero manages both itself and populates them from its own foreign currency revaluation, so neither will accept consolidation entries.

2. Select accounts to translate at historical rates

By default, all asset and liability accounts are translated at the period-end exchange rate. However, certain transactions — commonly called historical transactions — are recorded at the spot rate in effect when the transaction occurred and are not revalued in later periods.

How JustConsolidate handles this:

Based on user feedback, we've taken a simplified approach. Rather than tracking individual transactions, you designate specific accounts (typically equity accounts) to be translated at historical rates. For these accounts:

Period activity is translated at the average rate for the period
Beginning balances are carried forward without revaluation each period

To designate historical rate accounts:

Select the foreign currency subsidiary from the drop-down list.
Select the account(s) to translate at historical rates.
Click Lock Selection to confirm.

To add or remove accounts later, click Unlock and modify your selection as needed.

Opening Balance Sheet workflow (optional)

All balance sheet accounts in the opening balance sheet are translated at the period-end rate for the extract period. After posting, you may need to manually adjust some translated balances to reflect historical exchange rate differences.

To adjust: Post the opening balance sheet entry to your consolidation entity, then open the posted entry directly in your accounting platform and modify the affected balances. Offset your adjustment to the CTA account or the appropriate gain/loss account, as needed.

Period consolidations

FX rate entry

Period average and ending rates are preloaded by default. For more on managing FX rates, see FOREX Rate Management.

Translation methodology

When you run a period consolidation using the Single Period workflow, the review and confirm step displays each subsidiary's account balances in two views side by side:

The subsidiary's own currency
Translated into the consolidation entity's reporting currency

Translation impacts are broken out separately for beginning balance remeasurement and period activity, so you can see exactly where translation differences come from.

How translation is applied:

Account type	Translation rate
P&L accounts	Average rate for the period
Historical balance sheet accounts — period activity	Average rate for the period
Non-historical balance sheet accounts — period activity	Period-end rate
Non-historical balance sheet accounts — beginning balance	Revalued at the new period-end rate

Beginning balance revaluation: For non-historical balance sheet accounts, the beginning balance is revalued at the new ending rate for the period. The revaluation adjustment is displayed and posted separately from period activity — this supports cleaner analysis and note disclosures for cash flow statements.

Currency Translation Adjustment (CTA)

JustConsolidate automatically calculates the required CTA and posts it to the account you designated during setup.

Using the Multi Period workflow

The Multi Period workflow applies the same translation logic as Single Period — you just don't see the detail on screen. To review the translation detail for any consolidated period, use the Single Period workflow to look up the posted entry.

Multi-currency in your subsidiaries

Subsidiaries that use their accounting platform's multi-currency feature are fully supported. When JustConsolidate extracts balances, any accounts holding foreign currency transactions have already been converted into the subsidiary's own base currency by the platform before extraction reaches them.

Everything JustConsolidate posts into your consolidation entity is in that entity's own reporting currency, so multi-currency isn't needed there.

For QuickBooks Online users

Don't enable multi-currency in your consolidation company. QuickBooks Online has a validation rule where a journal entry fails to post if both sides of the entry reference accounts whose currency differs from the company's home currency. If you have a multi-currency account in a subsidiary mapped to a multi-currency account in the parent, your consolidation entry will fail with a validation error.

If multi-currency is already enabled in your consolidation company, it can't be turned off — but that's fine. Just avoid creating any multi-currency accounts in the consolidation company's chart of accounts and mapping subsidiary accounts to them.