Foreign Currency Transactions

Question

Hi

Sorry if this is a silly question, but when a transaction is processed in NetSuite that involves a currency not the Subsidiaries base currency so when I run reports which exchange rate does the system use? Is it the exchange rate of the period the transaction was processed or the exchange rate of the period I run the report?

And which rate does it use, Current, Average or Consolidated?

Clarisa De Torres-Oracle · Accepted Answer

HI @User_UEJ7U!

The value you select in the Subsidiary Context list for a report determines the data and currency to be used for amounts. The currency is the base currency of the subsidiary you select.

There are two types of financial reports that you can generate.

1. Subsidiary Level of Report - These reports pull out the amounts based on the transaction amount at the time that the transaction was created

2. Consolidated Level of Report - These reports shows the consolidated data for all child subsidiaries of the consolidated parent subsidiary, including elimination subsidiaries. As such, The consolidated exchange rate types and the types of accounts that use them are as follows:

Average – The weighted average of the currency exchange rates for all transactions posted during the period to accounts with a rate type of Average. This rate is used to translate accounts in the income statement and to build retained earnings.

Current – Also referred to as ending rate. This rate is the currency exchange rate that is effective at the end of the reported upon period. This rate is used for most asset and liability accounts in the balance sheet.

Historical – Same as Average rates, except for accounts with a rate type of Historical. This rate is used for equity accounts and owners’ investments.

Viewing the Financial Reports at a Consolidated Level, the system would be using the Consolidated Exchange Rates (Lists > Accounting > Consolidated Exchange Rates) depending on the General Rate Type of the account (Lists > Accounting > Accounts > Click Edit on a specific account to view).

For more information, you can check out SAID 7752.

Hope this clarifies! :)

Clarisa De Torres-Oracle · Accepted Answer

Hi @User_UEJ7U, were you able to check the comment above? :)