Maintaining historical rates

You can change historical rates only for open periods and if you have sufficient user role permissions.

Note: If the local currency balance is available, the corresponding values exist on the Data Entry page. The values can originate from these sources:
  • Carry Forward Schedules: When this process is run, the Opening Balance values (*_OB elements) are populated on the Data Entry page.
  • Data Entry Schedule Detail Distribution page: Values from this page are populated on the Data Entry page as the values of the Difference to distribute (*_NA elements).
  • Data Import page: Imported values are reflected on Data Entry page at the imported level.

    Local currency balances for currency translation differences (*_FX elements) are typically populated at the group level through the consolidation processes, not at the entity level. At the entity level, historical currency rates and transactional data are maintained. In the group-level processing, foreign exchange (FX) translation differences occur during consolidation when local entity balances are converted into group reporting currency such as USD or EUR.

Specifying a rate automatically calculates the group currency balance and vice versa.

  1. Select Rates and Reconciliation > Historical Exchange Rates > Historical Rates.
  2. Specify a configuration set, version, group currency, period, and entity.
    Information about historical rates for the specified context is displayed in the grid.
    Note: The selected group currency must differ from the selected entity's local currency. This list shows reasons why those currencies must differ:
    • Different reporting levels

      Entity currency is a legal entity's local currency, for example, PHP for an entity in Philippines. Group currency is the consolidation currency that is used at the group or corporate level. For example, USD or EUR. Identical group and entity currencies negate the benefits of consolidation and cross-entity comparison.

    • Currency translation logic

      Historical currency rates are used to translate balances from the entity to group currency. If both currencies are identical, the translation rate becomes 1:1 and no foreign exchange effect, which is critical for accurate consolidated finances, is shown in a report.

    • Audit and compliance

      Auditors and regulators expect clear foreign exchange translation and reconciliation between the local and group-level reporting. An identical currency for both reporting levels can, for example, lead to financial data misinterpretation.

    • Analytical insight

      Foreign exchange, revaluation effects, and use of historical rates are relevant only when currency differences exist. This is beneficial for the group-level performance analysis and risk management.

  3. To specify a rate or group currency balance, perform these actions for these historical rate types:
    • Historical rate (H):

      Specify a rate or group currency balance in the Rate or Group Currency Balance (ISO code) column, respectively.

      For details on calculations for historical rate types, see "Calculations for historical rates".

    • Historical rate intercompany (HI):
      1. Select a relevant row and click Change Rate.
      2. In the HI – Historical Rate Intercompany dialog box, specify the rate or group currency balance.

      For details on calculations for historical rate types, see "Calculations for historical rates".

    • Historical rate schedule (HS):
      1. Select a relevant row and click Change Rate.
      2. In the HS – Historical Rate Schedule dialog box, specify the rate or group currency balance.

      For details on calculations for historical rate types, see "Calculations for historical rates".

    • Historical rate schedule and intercompany (HD):
      1. Select a relevant row and click Change Rate.
      2. In the HD – Historical Rate Schedule and Intercompany dialog box, select an intercompany row and click Change Rate.
      3. In the displayed dialog box with schedule details, specify the rate or group currency balance.

      For details on calculations for historical rate types, see "Calculations for historical rates".

    Note: Suppression on rows applies only to the values of the local currency balance. If the local currency balance is missing, you can specify values only in the Rate column. When the rate is specified and the values of the local currency balance are imported or specified on the Data Entry page, the group currency balance is automatically calculated. When the rate is missing and the local and group currency balances are specified, the rate is automatically calculated. For HS and HD rate types, specifying or modifying historical rates for *_NA and *_FX details is disabled.