How to adjust foreign exchange rates: consolidated balance sheets

Learn how to effectively adjust foreign exchange rates on consolidated balance sheets for accurate financial reporting.

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By default, all balance sheet accounts at consolidated companies in ScaleXP are consolidated at the same exchange rate for a given month. This is based on actual month end rates. The Balance Sheet uses the average daily exchange rate on the last day of the month. Rates are to four significant digits sourced from Open Exchange Rates, www.openexchangerates.org.

This method is very useful for management accounting and consistency across accounts.

However, you may wish to adjust certain balance sheet accounts to reflect IFRS / GAAP rules as applied to your specific circumstances and applicable historic exchange rates for your entities.

Adjusting the rates in ScaleXP is easy.

Go to Load Data>Balance Sheet FX Adjustments

Select the account(s) to be adjusted.

Select Spot Rate and enter the desired rate.

The rates will automatically be applied to the balance sheet and an "FX Adjustment on Consolidation" will be calculated automatically to adjust for the differences.

This is usually added automatically to your Total Equity.

You can also add this to your Balance Sheet report yourself: select "FX Adjustment on Consolidation" as a line item or formula input.

How to set up consolidated reporting in ScaleXP

How to consolidate intercompany accounts in ScaleXP

How to eliminate intercompany accounts and add or remove accounts from elimination

How to add consolidation adjustments

FX rates: what foreign exchange rate is being used?

How to change historic FX rates and input custom foreign exchange rates