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Former Member
May 22, 2008 at 02:54 AM

Translation Differences - with effect on net income

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I have set up currency translation whereby:

Balance Sheet items: Closing rate

PL items: Average rate

Equities: Historical rate

Reference translation: Standard translation at average rate

Differences post to Currency Translation Reserve

My issue was, after running currency translation, the system will calculate the translation differences. The differences occured at PL, would be posted to the Currency Translation Reserve indication "Translation Differences - with effect on net income", where system will post additional entries to both Clearing Accounts in Balance Sheet and Income Statement. Our setting was that Clearing Account for Balance Sheet will be carryforward to Retained earnings for the next fiscal year, therefore this Translation Difference will affect our next fiscal year retained earnings. Practice wise, this should not be so, as the amount is al ready at the Currency Translation Reserve item (which is a balance sheet item itself).

How do I set that the translation differences from PL would not be post to the clearing accounts?

Thanks in advance.