About creating translation definitions

For each translation definition, create a reporting ledger to hold translation results, and specify the reporting currency as the ledger's currency in the Ledgers (GL201500) window.
The parent company can later use this ledger (in a subsidiary) as a source ledger for consolidation of balances.

You use the Translation definition (CM203000) window to define rules for the translation.
When you define a type of future translations, you specify the source and destination ledgers.
The balances for translation are taken from the source ledger.
If a posting ledger is specified as the source ledger, the translation is performed from the base currency into the selected foreign currency.
If you specify a reporting ledger as the source ledger for the translation, translation is performed from one foreign currency to another.

Also, you should specify the ranges of accounts and subaccounts to be translated and the translation methods.
You can specify different translation methods for different ranges of account–subaccount pairs.
These ranges should not intersect or contain the same pairs.

Visma.net ERP provides the following translation methods, which can be used for different types of accounts:

  • Year to date balance:
    Balances of the specified accounts (generally assets and liabilities) are translated using the exchange rate (of the type specific for this method) effective at the translation date.
    If there is a difference between the translated balance and the account balance stored in the translation ledger for the previous period, then the transaction will be generated to adjust the balance.
    CAUTION: The balance of the year to date net income account is not translated even if the account is included in one of the ranges.
  • Period to date balance:
    Balances of the selected accounts (generally income and expenses) are translated using the exchange rate (of the type specific for this method) effective at the translation date.
    If the period to date balance of the account is not zero, then the transaction will be generated to update the account balance by the translated period to date balance.
    All subsequent translations for the same period will adjust the account balance if it is changed.

In case you translate the account balances from one foreign currency to another, you should maintain direct exchange rates between those foreign currencies in the currency exchange rate database (at least two rate types for each period, for the period to date balance and year to date balance translation methods).

You can create the types of rates for translations by using the Currency rate types (CM201000) window and enter the current rates by using the Currency rates (CM301000) window.
The rates used for translations may be specified as the base currency rates with respect to the reporting currency.

The regulations of a particular country dictate the method of choosing the appropriate exchange rates for the translation.
In most countries, the method used to translate the financial statements from the base currency to the reporting currency depends on whether the base currency (the currency of the foreign operation) is the currency of a hyper-inflationary economy:

  • If the base currency is not hyper-inflationary, revenues and expenses are translated at the exchange rates effective on the dates of transactions or by using an appropriately weighted average exchange rate for the period. Assets and liabilities are translated at the period-end rate.
  • If the base currency is hyper-inflationary, all the balance sheet and income statement items are translated at the rate effective on the period-end.

You can view the result of translation on a translation worksheet in the Translation worksheets (CM304000) window.
If needed, you can manually edit the worksheet.

As you adjust the values, both the credit total and debit total in this window change synchronously to reflect the changes, because one of them contains the translation gain or loss.

When you are done editing, enter a new Control total value before you save the modified worksheet.

Parent topic:
Manage translations - overview

Related concepts
Overview of translations

Related reference:
Currencies (CM202000)
Translations history (CM401000)