# Weighted average rate to calculate a movement

Movements can be calculated using the average rate (A), closing rate (F), or the rate that is defined for the account (!). It is legally required that the value of certain movements must be identical to the total of a certain financial account in the profit and loss.

The profit and loss and the movement depreciation are identical if both are calculated with the YTD average rate (A). If the profit and loss is translated with the weighted average rate (WA), then the profit and loss and the movement are not identical. To make them identical, you must select the weighted average rate (WA) in the Rate column.

This table shows how depreciation is calculated with the weighted average rate if the YTD average rate of 1.2 is used in period 01 and 1.3 in period 02:

Description Local value Group value
Depreciation in period 01 200.00 166.67
Depreciation in period 02 300.00 243.59
``Period 02: (300 – 200)/1.3 + 200/1.2 = 243.59``

The closing balance of a financial account is still the same as the total of schedule details in the local currency. The currency translation difference is calculated in the group currency by comparing the values of schedule details that are calculated using the rate of the financial account's closing balance with those that are calculated using the schedule detail rates.

These tables show how the currency translation difference changes in periods 01 and 02 for these values:

• Opening balance: 1,000 in periods 01 and 02
• Increase: 500 in period 01 and 700 in period 02
• Depreciation in period 02 is calculated with the weighted average rate
• Opening balance rate: 1.2
• Increase is calculated with the YTD average rate of 1.2 in period 01 and 1.3 in period 02
• Closing rate is 1.3 for period 01 and 1.4 for period 02

Period 01

Description Local Value Group Value Rates
Opening balance 1,000.00 833.33 1.2
Increase 500.00 416.67 1.2
Depreciation -200.00 -166.67 1.2