Financial statements in foreign currency

Hi Manager programmers,

As always … you guys do a fantastic job with this software ! Thumbs up for your efforts !

My question :

Manager allows to do accounting in a single currency, even if multiple currencies are used in invoices, banking etc… Reports come out in the base-currency specified in settings, converted by the monthly or periodic exchange rates entered in settings also. Perfect !

However, If I want to convert my EUR report (my base currency) to a USD report, I need to :

  1. Export my report to excel file (not a problem)
  2. add a column USD next to the exported EUR amount column
  3. then multiply the EUR amounts by the EUR/USD exchange rate of report date in the USD column
  4. Now I have an excel sheet with EUR amounts and USD amounts next to each other, as final result.
  5. To make the report look good, I still have to format it so that it looks like the orginal Manager report, with headlines in bold etc…

My programming solution would be :

In all reports, have an additional dropdown button, where the base-currency is pre-selected, but where we can change that currency to USD.

When we then print the report, the program will run the report, but multiply all original base currency values by the selected currency exchange rate. It would be exactly as when the program converts foreign currency invoices, ledgers etc… to base currency at booking moment.

The result will be the same as if I do this via a converted excel sheet, but why do all these steps in an excel report, if the program could do it in a single step ?

If needed, I can add an example, but i think the situation as explained speaks for itself.

As to why we may need this : a company (A) in an EUR zone country must locally report in EUR, but if that company is owned by a foreign company (B) reporting in USD, then that mother company (B) will need a report in USD form the activities in company (A) to consolidate that company (A) report in the USD Company (B) report.

Hope you can this this, and have the time to do this … Thanks !

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Your procedure is not valid - sales and expenses are converted at the rate used on the day they are recorded not reported and balance sheet values are reported using the exchange rate on the report day. Any differences are included in the Gain/Loss on Foreign Exchange account

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Hi Joe,

I believe you misunderstood my request : I’m NOT talking about changing the re"cords at mùomen,t of booking, I very well know this is done automatically by Manager at moment of booking through the exchange rates settings and that differences are processed through gains/losses automatically. Totally agree with you on that, and that is how it also works with us.

What I’m requesting is : the option to print any base currency report (as it would come out of Manager) into another currency, by converting the report currency values to another currency at end of period report exchange rate.

Example :

I have a EUR balance sheet (my base currency) which include (just a sample):

  • Bank A (EUR account) = 100.000 EUR (this is 100.000 EUR bank balance in EUR)
  • Bank B (USD account ) = 9.000 EUR (This is 10.000 USD bank balance converted to EUR by the program)

But now, The USA holding company need to consolidate this European company annual accounts into their USA reporting, with USD currency.

So all EUR amounts of that EUR report need to be converted to USD :

  • Bank A (EUR account) = 111.111,11 USD (this is 100.000 EUR bank balance in USD)
  • Bank B (USD account ) = 10…000,00 USD This is 10.000 USD bank balance in USD)

Now the balance sheet items have been converted from EUR values to USD valmues and can be reported as USD into the consolidated USD report of the USA mother company.

This is how international reporting is done in consolidated reports. To compare with a real life example : Give an american a 100 EUR bill … unless you tell him that this 100 € bill is worth 111,11 USD he will not be able to say “I have 111,11 USD worth of EUR in my wallet”

As I said, at closure date the base currency report must be converted to USD (at closure date exchange rate) : standard IAS procedure

That could be easily achieved by copying to a spreadsheet and multiplying the whole thing with a fixed rate.

There’s not one single standard procedure. It all depends on whether:

  • The base currency is the functional currency
  • The base currency is hyperinflationary

But the most used translation method is to translate from the functional currency to a foreign reporting currency. That’s exactly what @Joe91 described

IAS plus provides a full in-depth technical discussion on the subject:
https://www.iasplus.com/en/standards/ias/ias21

But if you just want practical examples, PwC provides just that:
https://viewpoint.pwc.com/dt/us/en/pwc/accounting_guides/foreign_currency/foreign_currency__2_US/chapter_5_translatin_US/51_chapter_overview__7_US.html

Yes, indeed : easily done by exporting to an excel sheet and multiplying results by the destination currency exchange rate. This is exactly the procedure I do now, as I described it in my initial post. But you have to admit it would be easier if we could simple convert the report directly to another destination currency with a single push of the button : same result as with excel export, but much faster and already formatted. As to IAS standards :my example is a very simple one, I know how to consolidate and what needs to be taken into consideration for consolidated reports; That was not the topic of my post.
Regards

I think for balance sheet report, this can be done easily.

@Joe91 is correct but that is for Profit & Loss Statement.

It’s not clear to me whether this feature request is about having ability to generate balance sheet in foreign currency only or Profit & Loss Statement too.

Hi Lubos,

Ideally for Balance sheet and PL statement, and if possible also for Trial balance.

Let’s say we run a report for a period ending on a specific date and the base currency is EUR, then creating the report there is an additional dropdown button where you can select a destination currency different from the base currency. The report will then look up the exchange rate of that report date of the destination currency in settings/exchange rates and convert all original base currencies of the report to the destination currency.

There is no real need for report click-through to orginal transactions in these converted currency reports, as this is available in the standard reports, but if it’s also possible to add this click-through function in the converted reports, that would be fantastic.

Thank you for the fantastic work you do on the manager software !!!

Just out of curiosity: how many times a year do you have to do this?

As Many times You want Your Final Reports in other Currency

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We’re in a financial services industry, running millions of transactions per year. The sums of these transactions are entered into Manager weekly, so we run our interim EUR balance and PL weekly, then convert to GBP and USD for weekly reporting purposes. Then we do monthly full closures and again run monthly EUR reports, and convert them to GBP and USD. 52 weekly + 12 monthly + 1 end of year report + a few trial balances … about 100 times per year.
Kind of a strange question, doesn’t really matter if we do these conversations yearly, monthly, weekly or even daily … being able to convert a base currency report to any other currency just automates the work.

Not that strange at all. In fact I believe that that should’ve been the first question to have been asked.

When you introduce features you have to think of the costs vs benefits. It makes no sense to bloat the program with niche features that will save 5 seconds per day for the user let alone 5 seconds a year for 5% of users.

If, on the other hand, many users are going to use the feature on a regular basis – just like you described, then maybe that will justify the costs of adding such a feature.

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Well, as I stated earlier, we would use this feature at least weekly, monthly and yearly, so that makes it already 52+12+1= 75 uses per year, without counting that at any weekly or monthly or yearly closure, we run several reports after a set of bookings, to see if the result is what we expect.
As to “saving 5 seconds” : Exporting a report to excel, adding a column, multiply the original currency by the end of period exchange rate of the destination currency, may take just a few minutes, but add the time to format that excel report to something that looks like a nicely formated Balance sheet and PL form, and you quickly arrive at 30 minutes for the report to be as we want it to be. 30 minutes x 75 reports minimum = 37 hours per year = almost a full business week time saved.
Add to this the fact that any manipulation of excel files can result in an error, which a program will not make.
If not too time consuming for the programmers, it saves me a weeKs’ work a year.
I leave it to manager programmers to decide if it’s a feature that is easily added and worthwhile.

I encourage this feature.

We also need such a feature Very much. as it gives us a clearer picture of the company and the status of profits and losses (I talk about it in light of exchange rate changes over a period of time)

It’s really useful and gives the manager more abilities.
Especially since it’s no longer complicated.
They just need to convert all the report numbers into the required currency figures based on the exchange rate at the time of the report’s creation.

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I second, with many companies having branch networks or incase of NGO’s they would want to report in base currency and the currency of the donor.