JustConsolidate is designed to handle foreign currency subsidiaries. When one or more of your subsidiaries reports in a different currency, there are a couple of additional setup steps to complete.
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 parent company account to use.
To set it up:
- From the drop-down list of accounts in your parent/consolidation entity, 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.
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.