8.1 Foreign entities

We recommend using the foreign currency translation function in your consolidation system to handle different currencies. This means that the input for Share Control should be recorded in the reporting entities, based on their functional currencies. This can be handled by the accounting integration function (Additional product).

In the recently released 2020 version, you can choose between calculating contracts in foreign currency at the closing exchange rate or to the average exchange rate. This can be found in the Currency Settings section of Application settings, which is found on the menu page. If Use closing currency rates only is unchecked, as shown below, then the calculation will use average exchange rates for income statement captions.

You can choose between exchange rates from Norges Bank or Sveriges Riksbank.

The calculation will now automatically convert income statement captions (Interest and depreciation) to the average rate for the actual month and balance sheet captions to the closing rate for the chosen period. The opening balance will be converted in accordance with the closing exchange rate for the prior period. All future payments, as in footnotes or future payments in forecast, is translated in accordance with the closing exchange rate. The exchange rates follow the date selector, meaning that if the end date is set to March, it uses the exchange rate at the end March as the closing rate, if available. Forecasting and budget uses the same currency table as the other summary sheets. Thus, if you set the main lookup to be 2020 and do a forecast for 2022, then it will be converted in accordance with the closing exchange rate for 2020. It’s therefore important to set the appropriate Menu lookup period before generating the forecast.

The exchange rate difference will be automatically calculated, in the reconciliation spreadsheet, as well as, in the footnote disclosure, for the liability, as well as the right of use asset. This is useful for currency translation for foreign operation. For individual contracts, please see below.

The currency effects are shown as illustrated below in the footnote.

They are also shown in the complete fixed asset footnote (Pro-version).

To review the exchange rates used, click the Edit currency table button on the menu page, which shows the table of exchange rates used (In this example the exchange rates are retrieved from Norges Bank).

You can also review all or some of the foreign exchange rate formulas in the spreadsheet, by using the setting below. Show some means that only changes and balance sheet captions will have the conversion shown as an Excel formula, while all other results will be pre-calculated.

Finally, the amount in other comprehensive income (Net of currency effects on Lease liability and Right of use asset) is shown under other comprehensive income in the tab note disclosure.