Consolidating foreign currency nominal ledgers

Sage 200 can consolidate Nominal Ledgers operating in different currencies. This is done by using the exchange rates, set up in the parent company, to convert the journals from the subsidiary company to the currency used by the parent company.

Note: If you are consolidating between two companies that have different base currencies, and the parent company currency Rate Type is Single & Period, then the Single exchange rate is used during consolidation. The Period exchange rate is not used.

However, there are implications for producing accurate management reports.

When consolidation is performed, the exchange rates used are those stored in the parent company at the time. Each consolidation accumulates balances, so different exchange rates are used. This means that effectively, the balances use an average exchange rate. The profit and loss for the parent company will conform to accounting standards but the balance sheet will not.

To consolidate Nominal Ledgers in different currencies, follow the steps for consolidating Nominal Ledgers in the same currency.

When you want to produce a balance sheet for the parent company, you must follow the additional steps below. This is to make sure that your balance sheet conforms to accounting standards. Once you have printed the balance sheet, you will need to restore the data. This is because the balance sheet and the profit and loss have to be calculated in two different ways.

To make sure the balance sheet uses the current exchange rates

1. Consolidate the companies as normal.
2. Print the Profit and Loss statement for the parent company.
3. Backup or copy data for the group and each subsidiary company.
4. In the parent company, zero the balances of the nominal accounts.
5. In the subsidiary company, clear the consolidation amounts.
6. Consolidate each subsidiary company. This posts values, using the current exchange rate, to the parent company.
7. Print the Balance Sheet for the parent company.
8. Restore the copied data. This is to make sure the profit and loss for both the subsidiary company and parent company also remain correct.