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Multi-Currency Conversion in a Consolidation

Consolidate companies with multiple currencies and have Reach Reporting handle currency conversion automatically.

In this article:

Overview


You can consolidate companies with different currencies and have Reach Reporting automatically handle foreign currency conversion by using historical exchange rates within a consolidated company. For Profit and Loss and Cash Flow Statements, the monthly average exchange rates are used, and for the Balance Sheet, the end-of-month exchange rates are used (in accordance with IFRS and GAAP guidelines).

When you have a consolidated group of companies operating in different currencies, Reach Reporting uses these historical exchange rates to convert all accounts to your selected reporting currency. This allows you to generate unified financial statements and dashboards in a single currency while maintaining accuracy according to accounting standards.

How Currency Conversion Works

Setting Up Currency Conversion in a New Consolidation

To enable currency conversion when creating a new consolidation:

Step 1: Follow the steps for Creating a Consolidation in the Consolidations article.

Step 2: The corresponding currencies will be displayed for each company, based on the Currency Symbol in each company’s Company Settings. If any currencies are displayed incorrectly, you can make adjustments in each company’s Company Settings > General Settings > Currency Symbol.

Step 3: Choose your desired reporting currency, then check the box to enable currency conversion.

Step 4: Give the consolidated company a name and then click Consolidate to finalize your consolidation.

Once created, you can generate reports and dashboards using the common reporting currency.

Setting Up Currency Conversion in an Existing Consolidation

To enable currency conversion in a consolidation that has already been created, click Manage after expanding the consolidated company from your workspace home.

Note: Only the Workspace Owner, Secondary Admin, or the user who initially created the consolidation will have access to the Manage option.

Once you access the Manage menu:

Step 1: Choose your desired reporting currency

Step 2: Check the box to enable currency conversion

Your consolidation will now convert all financial data to the selected reporting currency using the appropriate historical exchange rates.

Exchange Rate Assignment

Reach Reporting automatically assigns the appropriate exchange rates based on account type:

  • Profit and Loss Accounts: Monthly average exchange rates for the given month
  • Cash Flow Accounts: Monthly average exchange rates for the given month
  • Balance Sheet Accounts: End-of-month exchange rates for the period (in accordance with IFRS and GAAP standards)

Verifying Exchange Rates with Data Sheets

Using Exchange Rates in Data Sheets

You can create a data sheet within your consolidation to pull and display exchange rate information. This is helpful for:

  • Verifying the correct rates are being applied
  • Creating audit-ready documentation
  • Communicating rate assumptions to stakeholders

How to Display Exchange Rates in a Data Sheet

Step 1: Create a new data sheet within your consolidation

Step 2: In the data sheet, navigate to Add Data/Rows > Data > Other Sources > Exchange Rates

Step 3: Select the exchange rate type(s) you want to display and then click Add Data:

  • End of Month — Exchange rates used for Balance Sheet accounts

  • Monthly Average — Exchange rates used for Profit and Loss and Cash Flow accounts

Step 4: Highlight the rows containing the exchange rate data

Step 5: Increase the decimal places to view the granularity and precision of the rates being applied

This approach allows you to review, document, and communicate exchange rate assumptions to stakeholders with full transparency.

Exchange Rate Source

Exchange rates are sourced from https://openexchangerates.org/ to ensure accurate and up-to-date currency conversion data.

For budgets and forecasts: Budget numbers for future months will use the most recent known exchange rate value.

Currency Translation Differences (FCTR)

Translating financial statements into the reporting currency using different historical exchange rates leads to currency translation differences on the Balance Sheet (i.e., assets will not equal liabilities plus equity). This is a normal accounting outcome when consolidating in multiple currencies.

Handling FCTR Adjustments

A reconciling figure that takes these translation differences into account should be introduced into your consolidated financials. Foreign Currency Translation Reserves (i.e., currency translation differences) are typically recorded:

  • On the Balance Sheet: Under the Equity section
  • On the Cash Flow Statement: As a separate line item under "Effects of Currency Translation Differences" (not under Financing Activities)

For more information on accounting standards related to foreign currency translation, see:

Current Solution

In the near future, Reach Reporting will automatically handle FCTR adjustments for you. In the meantime, you have two options:

Option 1: Custom Row Calculation

Use a custom row calculation to add the difference between assets and liabilities plus equity on both the Balance Sheet and Cash Flow Statement

Option 2: Separate Entity

Book currency translation differences in a separate entity and then consolidate it with your other companies

If you need to eliminate certain accounts that have FCTR adjustments, you can do so by choosing them from the entity where adjustments are booked and leaving the offsetting accounts in the other consolidated companies unselected. This helps properly convert your companies into the reporting/presentation currency. See Eliminations in a Consolidation for more information on how to add eliminations.

Limitations

Currency conversion is not available for CSV or MYOB consolidations. This feature is only available for consolidations using data from the following integrations:

  • QuickBooks Online
  • QuickBooks Desktop
  • Xero

If you need currency conversion capabilities, ensure your consolidated companies are connected through one of these supported integrations.

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