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.

The process is the same as when consolidating in the same currency. 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.

The following procedure will 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.