Translation codes

For each currency relationship in which you want to translate a company's financial statements, you may need to define several sets of rates, depending on the financial statements you want to translate. To differentiate between sets of rates for the same currency relationship, the Currency application uses translation codes. Translation codes identify the rate type and ensure that the correct translation rate is applied when translating an account.

  • For balance sheet accounts, you are required to use translation rates that show the last rate in effect for each period. (Rate Type = Ending)

  • For income statements, you are required to use translation rates that show the average rates for each period. (Rate Type = Average)

  • For some balance sheet accounts, such as fixed asset accounts, you may also want to use historical translation rates showing the rates in effect on the date of a transaction. (Rate Type = Historical)

    Note: A Historical rate does not mean a rate that never changes. If the translation code for the Historical rate is defined with changing rates, the account balances are updated according to the rate in effect for the translation code at the time of the translation.

  • Use the Historical Balance type to have the translated amount calculated by adding historical translated balances to the current period activity and translated at the period rate.

A translation code is assigned to each chart of accounts detail account. The Currency application provides two default translation codes that it automatically assigns to chart of accounts detail accounts as follows:

  • Chart Section One (Balance Sheet) detail accounts are assigned a translation code of BS (Balance Sheet) with a rate type of E (Ending).

  • Chart Section Two (Income Statement) detail accounts are assigned a translation code of IS (Income Statement) with a rate type of A (Average).

You can also define your own translation codes and assign them to any detail account. Any account assigned that translation code is translated using the rates you define for the relationship and translation code.