For each financial period, to perform a translation, you first prepare the translation—that is, you specify the translation settings and create a translation worksheet in the system. You then check the translation worksheet, make corrections (if necessary), and release the worksheet.
To enable translation of financial statements in the system, the Multicurrency Accounting and Translation of Financial Statements features must be enabled on the Enable/Disable Features (CS100000) form.
In this chapter, you will learn how to do the following:
You perform the translation of financial statements if your company is a subsidiary of a larger entity that operates in a different currency, and your company’s financial statements are included in the parent entity’s consolidated statements, which are prepared in a different currency.
In general, the translation process consists of the following steps:
For each financial period for which you want to translate balances, you prepare a translation on the Prepare Translation (CM501000) form. On this form, you specify the following settings:
In the Summary area of the Prepare Translation form, the system automatically fills in the settings of the selected translation definition (that is, the source ledger and currency and the destination ledger and currency). The table displays the currency rates that will be used in the translation. These are the rates of different rate types that are effective on the translation date.
After you have specified the settings for the translation, you click the Create Translation button on the form toolbar. The system creates the translation worksheet, which shows the translated account balances, on the Translation Worksheets (CM304000) form.
The system will prevent you from preparing a translation and will display an error message in any of the following cases:
Before you release a translation worksheet, you can view it on the Translation Worksheets (CM304000) form. On this form, the Source Amount column shows the amount to be translated: the PTD balance for the accounts translated with the PTD Balance method, and the ending balance for the period for the accounts translated with the YTD Balance method. These accounts and the translation methods have been specified in a translation definition related to the worksheet on the Translation Definition (CM203000) form.
The Translated Amount column shows the source amount that the system converted by using the specified currency rate as follows:
The Transaction Debit Amount and Transaction Credit Amount columns show the amount in which the account will be debited or credited in the translation batch to yield the needed balance.
Before you release a translation worksheet, you can manually edit the worksheet, if needed. To do so, on the Translation Worksheets form, you edit the amounts in the Transaction Debit Amount and Transaction Credit Amount columns.
As you adjust the values, the credit total and debit total on this form change synchronously to reflect the changes, because one of them contains the translation gain or loss.
To release a single prepared translation worksheet, while viewing the worksheet on the Translation Worksheets (CM304000) form, you click Release on the form toolbar. You can also release multiple prepared translation worksheets on the Release Translations (CM502000) form.
Before you release a translation, you should make sure that you have released the translation for the previous periods. If any periods were skipped, you will see incorrect balances of the accounts that have been translated with the PTD Balance method selected on the Translation Definition (CM203000) form, and that have nonzero PTD balances for the skipped periods.
On release, the system generates a currency management batch for each translation. If the Automatically Post to GL on Release check box is selected on the Currency Management Preferences (CM101000) form, the batch is posted to the reporting ledger. If this check box is cleared, you need to post the batch manually to the general ledger.
Sometimes after a translation is performed for a period, some new transactions are posted to the actual ledger in this period. In this case, you have to perform the translation (that is, prepare and release it) one more time for that period; subsequent translations for the same period will adjust the account balance if the account balance has changed.
If you have used the wrong currency rate in the translation, you should change the rate to the correct one and prepare and release the translation.
The diagram below illustrates how the system performs the translation of the account balances by using the EUR translation definition. For details on configuring this translation definition, see Translation Definitions: Implementation Activity. The system translates assets, liabilities, income, and expenses by using the methods and currency rates of the rate types that are specified in the translation definition.
To get the correct translated balance of the Retained Earnings account in the reporting ledger, you need to translate the period-to-date (PTD) balances of income and expense accounts in each period, starting from the very first one. In addition, you need to translate the transactions that were posted manually to the Retained Earnings account (if any). These transactions update the account PTD balance in the transaction period, and the system would translate the account balance by using the PTD Balance method selected for the account in the translation definition. That is why you have to start translations from the first period in which the company begins operations in Acumatica ERP, which is 12-2025 for the company used in the activities of this guide.