Hi Friends,
Hope all is well your way. It’s been almost a month i could not write here as i went busy with work. Now here is one which i recently worked on for a customer.
In the subsequent paragraphs i will explain how to perform the currency conversion for a subsidiary company operating on a foreign currency and also we will explore how to perform consolidation of this company with the parent company transactions.
Scenario: let us assume that the subsidiary company is SUB which operates in GBP (Britain Pounds) currency and the parent company PAR reports in USD(US Dollar) currency. We will perform currency conversion followed by consolidation for the subsidiary company.
The first task we have for this requirement is to perform the currency conversion for SUB company so that we can perform the consolidation then.
Steps for the currency conversion:
- Navigate to Administration > Company accounts form and create a new company account and name it as CUR , Consolidation I – Currency conversion.
- Select the company account.
- Navigate to GL > Setup > Exchange rates form.
- Create a new currency called USD(main currency of parent company) and give 100.00 as exchange rate for this with a blank date.
- Navigate to GL > Setup > Parameters form and Mark the Consolidated company account check box.
- Come back to the Exchange rates form and create the currency of the subsidiary company which is GBP is this case.
- In the exchange rates grid below , setup all the historical exchange rates.
- Click on the consolidate tab and setup the closing and average rate.
- Navigate to Basic > Setup > Company information and give suitable company information and setup the primary currency as USD under the Other tab.
- Create the chart of accounts in the consolidated company. For the currency conversion task , you may prefer to choose identical COA as of the subsidiary company and then set the consolidation conversion principle for each of the accounts. Select between Historical, Average and Closing.
- Select the Subsidiary company and go to chart of accounts form. For each of the accounts, setup the mapping for the chart of accounts for the consolidation company CUR.
- Now , navigate back to the CUR company and go to GL > Periodic > Consolidation > Consolidation Online.
- Select an account range if needed if not leave it blank, select the period for which you want to convert the transactions into USD, Mark the Consolidation account, Current check box.
- Click the Companies tab and Select SUB from the look-up. Give Share = 100 %.
- Click Ok button.
- This will convert all the transactions into USD and you can enquire the same at Inquiries > Consolidation.
Note : The setup for historical, average and closing rates are required as usually Income statement accounts will be converted on month average, balance sheet (non-equity) accounts on month closing and balance sheet (equity) accounts will be converted on historical rates under the US GAAP.
Steps for the Actual consolidation:
- Create a new company account called CON.
- Do the similar setup as done above. Note that the GBP setup is not needed here as we will just consolidate the transactions.
- Do the COA setup for this and map these accounts both is PAR and CUR companies by specifying these in the Consolidation account field.
- Run consolidation from Periodic > Consolidation Online and specify both companies PAR and CUR under companies tab.
- Go to consolidation inquiries and verify that the transactions are consolidated.
Assumption:
The scenario described above is just one of the cases for consolidation when the subsidiary company is in a foreign currency. The COA setup, exchange rate setup and account mapping will differ from customer to customer. The best decision is to be taken as per that.
Questions on this are most welcome.
Thanks, keep DAXING. 🙂
Microsoft Dynamics 365 Blog 
Hello – Am I doing something wrong? When I ran the conversion the balance sheet accounts only revalued the activity and not the period end balance. For example, Cash had a balance of 100,000 EURO, In Janaury cash increased by 50,000 EURO. The system did not revalue the ending balance of the 150,000 but only the 50,000. Help ! Thanks
Hi Neil,
Sorry to say that i did not find the phrasing of your question very indicative. 😦
However, from what i understood from your question, below are comments and recomendation.
The currency conversion and consolidation engine in dynamics AX will not incliude the opening balances of the accounts.
To get this done and include the opening balances, run the fiscal year end close in the company. This will get the oprening balance included.
Let me know if i ansewred your question.
Thanks
Sandeep
Hi Sandeep,
Awesome tutorial.
Just a simple qn: What would you do if the UK company was on a different server (and AOS) in the UK and the paremt with its server and AOS in US.
How do you tranfer etc
One question here JJ… wouldnt they have same application and DB? You can try to still use “Consolidation, online” or there are other options.
Use “Consolidation, export” in one company and then use “Consolidation, import” in another. This uses flat files to do export, import. The parameters for consolidation remains the same.
Hi JJ,
Please see Sumit Loya’s comment. Thats the answer.
Thanks
Sandeep
am grateful for your response. Do you also answer the questions on X++/MorphX environment?
Good Morning Sandeep,
can you explain in breif about Physical Negative Inventory?
Hi Ranga,
Microosft dynamics AX tracks the inventory value in 2 different categories/buckets.
1. Physical Inventory.
2. Financial Inventory.
The packing slip posting of SO or PO does a physical inventory update and the corresponding invoice posting does the financial inventory update.
If the physical negative inventory is enabled in dynamics AX ( Physical Negative Inventory checkbox marked), the system allows inventory issues irrespective of the current available inventory(On-Hand). If this checkbox is not marked, system does a validation against the current total available( on hand )inventory and does not allow the posting.
Now, say for e.g. , if i create a PO for an item with 5.00 Qty. with unit price Rs. 1.00 each and post the packing slip, it will do the physical inventory update. (Physical cost amount = Rs. 5.00).
Now if i create a sales order for a quantity of 6.00, system will give me error ” 600 cannot be picked because only 5.00 is/are available from the inventory” when the Physical negative inventory check box is not marked.
Let me know if you need more info on this.
Thanks
Sandeep
Hello Sandeep,
How are you today?
I got a doubt when I amgoing through the Inventory Managment knowledge documents in AX. What is “order input transport”, after the items arrived following the purchase order?
Hello Sandeep,
How are you doing? can you tell me the use the exact purpose of using number sequence groups either for vendors or for customers?
Thanking you,
Ranganath
Hi Ranganath,
You can opt to specify a number sequence group for a vendor/customer if the bussiness requires any specific documents(These could be invoice vouchers, internal invoices, packing slip vouchers, internal packing slips, credit note vouchers, and internal credit notes etc) for the vendor or customer to have a different number sequence other than the one specified in the Number sequences tab of the AR or AP paramters form.
You can setup the desired number sequence under the reference tab of the number sequence form for which number sequences needs to be different.
Do let me know if you need further information on this.
Thanks
Sandeep
Sandeep,
can you tell me the purpse of the field “Customer Account” in Accounts Payable–> Common Forms –> Vendor Details –> General?
Ranganath,
The customer account field is significant when we run the Reimbursement periodic job under Accounts Receivable module.
Say for example, if a customer has a credit amount(may be because they made a overpayment or credit notes are created for them), then when the Reimbursement job is run, the amount is transfered to the vendor account for which the Customer account is specified under the vendor.
Do let me know if you need more information on this.
Thanks
Sandeep
sandeep,
My doubt got cleared…
thank you..
Good Morning Sandeep,
I got a doubt in setting up number sequence for vendor account in account payable. I created a number sequence with a
Number Sequcence Code : Acco_Oseas
Name: Overseas vendor acccount
Smallest: 666
Largest: 6666
Next: 667.
In this scenario, I want to know, if the overseas vendor account starts with 666/667 when creating/using the vendor template?
Good Morning Sandeep,
I am ranganath. the informaiton you furnished is really helpful. I am fresher into axapta domain. I am struggling to get to know about few of the navigation options in axapta. For instance, in Accounts Payable–> places–> vendors–> vendors on hold. when, i tried to open vendors on hold, the page opened is just a template where I can select vendor details. Can you tell the instance to use the option “vendor on hold”/ otherwise, a source where I can get help to know the functionality of axapta…
Hi Ranganath,
The AP > Places > Vendors > Vendors on hold is a list page which show the set of filtered vendors which have been kept on hold. When i say vendors kept on hold , the value for the Stopped field under the General tab of vendor details form will be set to either all or invoice. This means the Vendors on hold list page displays the list of vendors which are eitther stopped or the invoice for them is stopped.
Let me know if you need further clarifrication on this.
Thanks
Sandeep Chaudhury