Report currency translation (intracompany)

Report currency translation (intracompany) is the process of converting base amount balances within a Lawson company to a report currency so that financial statements can be produced in one company currency or consolidated for multiple companies.

For example, a business entity is part of a parent company that operates in a different country with a different base currency and it needs to generate financial statements in the parent company's currency rather than its own base currency. The business entity applies the appropriate translation rates to its base amounts by running Report Currency Translation (GL196), which converts base amount balances to a report currency.

Note: The Lawson Report Writer application accesses report currency amounts from the General Ledger accounts, using report currency data dictionary names identified by the suffix RAM.

Report currency translation is generally performed at the end of the period. All translation is done in General Ledger on period balances and amounts are cumulated from period to period. With each run, the General Ledger application creates an offsetting gain or loss to a translation gain or loss account, defined in the chart of accounts. Report currency translation is used in the General Ledger application only.

To use report currency translation (intracompany), you must perform these setup tasks:

  • Select the Translation option on Company (GL10.1).

  • Define one or two report currencies to which you want to translate on Company (GL10.1).

  • Set up translation gain and loss accounts for the company.

  • If you do not want to use the default translation codes, define translation codes representing the types of rates to be used in the translation.

  • For each currency relationship and translation code, define the translation rates to be used for the year and period being translated.

Example

XYZ Corporation has offices in the United States, Germany, and France. They need to produce consolidated financial statements in US dollars for all the companies. XYZ Corporation-Germany and XYZ Corporation-France define USD as a report currency. The balances in XYZ Corporation-Germany and France are converted to US dollars within the individual companies. The balances from all three companies can then be combined to produce a consolidated financial statement using Lawson Report Writer.