How to: Set Up the Additional Reporting Currency

Follow these steps to set up the additional reporting currency:

  • Specify general ledger accounts for posting exchange rate adjustments.

  • Specify the exchange rate adjustment method for all general ledger accounts.

  • Specify the exchange rate adjustment method for VAT entries.

  • Activate the additional reporting currency.

To specify general ledger accounts for posting exchange rate adjustments

  1. In the Search box, enter Currencies, and then choose the related link.

  2. In the Currencies window, specify the following fields for the additional reporting currency.

    Field Description

    Realized G/L Gains Account

    The general ledger account to which exchange rate gains for currency adjustments between LCY and the additional reporting currency will be posted.

    Realized G/L Losses Account

    The general ledger account to which exchange rate losses for currency adjustments between LCY and the additional reporting currency will be posted.

    Residual Gains Account

    The general ledger account to which residual amounts that are gains are posted if you post in the general ledger application area in both LCY and an additional reporting currency.

    Residual Losses Account

    The general ledger account to which residual amounts that are losses are posted if you post in the general ledger application area in both LCY and an additional reporting currency.

Note

Residual amounts can occur when Microsoft Dynamics NAV rounds debit and credit amounts that have been converted from LCY to an additional reporting currency.

For each general ledger account, you must specify how general ledger amounts for that account will be adjusted for exchange rate fluctuations between LCY and the additional reporting currency.

To specify the exchange rate adjustment method for all general ledger accounts

  1. In the Search box, enter Chart of Accounts, and then choose the related link.

  2. In the Chart of Accounts window, select the relevant account.

  3. On the Home tab, in the Manage group, choose Edit to open the G/L Account Card window.

  4. On the Reporting FastTab, select the correct method in the Exchange Rate Adjustment field.

    If you post in an additional reporting currency, specify in the Exchange Rate Adjustment field how this general ledger account will be adjusted for exchange rate fluctuations between LCY and the additional reporting currency.

    The following table shows the options to choose from.

    Option Description

    No Adjustment

    No exchange rate adjustment is made to the general ledger account. This is the default option.

    Hh169189.Important(en-us,NAV.70).gifImportant
    This option should be selected if the exchange rate between the LCY and additional reporting currency is always fixed.

    Adjust Amount

    The LCY amount is adjusted for any exchange rate gains or losses. Exchange rate gains or losses are posted to the general ledger account in the Amount field and to the accounts you specified for gains or losses in the Realized G/L Gains Account and Realized G/L Losses Account fields in the Currencies window.

    Adjust Additional-Currency Amount

    The additional reporting currency is adjusted for any exchange rate gains or losses. Exchange rate gains or losses are posted to the general ledger account in the Additional-Currency Amount field and to the accounts you specified for gains or losses in the Realized G/L Gains Account and Realized G/L Losses Account fields in the Currencies window.

    Exchange rate gains and losses are posted first when you run the Adjust Exchange Rates batch job. In that batch job, the adjustment exchange rate is identified in the Currency Exchange Rates window, and then the amounts in the Amount and Additional-Currency Amount fields on the general ledger entry are compared to determine whether there is an exchange rate gain or loss. The batch job uses the option that you select in the Exchange Rate Adjustment field to determine whether to calculate and post exchange rate gains or losses for general ledger accounts.

  5. Close the G/L Account Card window.

To specify exchange rate adjustment method for VAT entries

  1. In the Search box, enter General Ledger Setup, and then choose the related link.

  2. In the General Ledger Setup window, on the Reporting FastTab, select the required method in the VAT Exchange Rate Adjustment field.

  3. If you post in an additional reporting currency, you can specify in the VAT Exchange Rate Adjustment field how the accounts set up for VAT posting in the VAT Posting Setup window will be adjusted for exchange rate fluctuations between LCY and the additional reporting currency.

    When you run the Adjust Exchange Rates batch job, the adjustment exchange rate is identified in the Currency Exchange Rate window and then the amounts in the Amount and Additional-Currency Amount fields on the VAT entry are compared to determine whether there is an exchange rate gain or loss. The batch job uses the option that you select in this field to determine how to post exchange rate gains or losses for VAT accounts.

    You have the same options as with general ledger entries but in this case the entries adjusted will be the VAT entries.

    Option Description

    No Adjustment

    No exchange rate adjustment is made to the general ledger account. This is the default option.

    Adjust Amount

    The LCY amount is adjusted for any exchange rate gains or losses. Exchange rate gains or losses are posted to the general ledger account in the Amount field and to the accounts you specified for gains or losses in the Realized G/L Gains Account and Realized G/L Losses Account fields in the Currencies window.

    Adjust Additional-Currency Amount

    The additional reporting currency is adjusted for any exchange rate gains or losses. Exchange rate gains or losses are posted to the general ledger account in the Additional-Currency Amount field and to the accounts you specified for gains or losses in the Realized G/L Gains Account and Realized G/L Losses Account fields in the Currencies window.

To activate the additional reporting currency

  1. In the Search box, enter General Ledger Setup, and then choose the related link.

  2. In the General Ledger Setup window, on the Reporting FastTab, choose the Additional Reporting Currency field to select the additional currency that you want to report in.

  3. When you leave the field, Microsoft Dynamics NAV displays a confirmation message describing the effects of activating the additional reporting currency.

  4. Choose the Yes button to confirm that you want to activate the currency.

  5. The Adjust Add. Reporting Currency batch job opens. This batch job converts LCY amounts on existing entries to the additional reporting currency. The batch job uses a default exchange rate copied from the exchange rate that is valid on the work date in the Currency Exchange Rates window. Residual amounts that occur on conversion of LCY to additional reporting currency are posted to the residual gains and losses accounts specified in the Currencies window. The posting date and document number for these entries is the same as the original general ledger entry. After all these residual entries are posted, the batch job then posts a rounding entry on the closing date of each closed year to the retained earnings account. This is to make sure that the ending balance of the income accounts for each closed years is 0 in both LCY and the additional reporting currency.

  6. Choose the OK button to run the batch job.

  7. After running this batch job, amounts on the following existing entries will be in both LCY and in the additional reporting currency:

    • General Ledger Entries

    • Item application entries

    • VAT entries

    • Job ledger entries

    • Value entries

    • Production order lines

    • Prod. order ledger entries

    In addition, all future entries of the same type will have amounts recorded in both LCY and the additional reporting currency.

Note

The Add. Reporting Currency field will only be activated after you choose the OK button in the Adjust Add. Reporting Currency batch job.

See Also

Concepts

About Using Additional Reporting Currencies

Other Resources

Realized G/L Gains Account
Realized G/L Losses Account
Residual Gains Account
Residual Losses Account