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Foreign Currency Translation (Cloud) ​

What it is: A toggle on the Working Trial Balance that automatically converts all balances from one presentation currency to another and adds a Foreign Currency Translation Reserve to the equity section.

What it's for ​

When a client's trial balance is in one currency but the financial statements must be presented in another — for example, a company that operates in US Dollars but reports to shareholders in Rands — Foreign Currency Translation handles the conversion automatically. It applies the correct exchange rate to each category (end-of-year rate for balance sheet items, average rate for income statement items) and creates the balancing FCTR equity reserve required by reporting standards.

This feature works for standalone entities. For consolidations involving foreign subsidiaries, see Consolidations (Cloud).

How to do it ​

Setting up Foreign Currency Translation ​

  1. Navigate to the Working Trial Balance.
  2. Select Setup Foreign Currency.
  3. Enter the translation details:
    • Currency Symbol — the foreign currency symbol to display on the Annual Financial Statements when FCT is active.
    • Currency Description — the name of the currency to display.
    • Spot Rate — the exchange rate at the end of the financial year; applied to Balance Sheet items.
    • Average Rate — the average exchange rate for the year; applied to Income Statement items.
  4. Select Save.
  5. Select Toggle Foreign Currency to activate the translation.

What changes on activation ​

  • New FCT Final columns appear in the Working Trial Balance, showing the translated values alongside the original currency values.
  • A Foreign Currency Translation Account entry is automatically added to the trial balance and linked as an Equity Reserve. This is the balancing entry that accounts for the difference between the Spot and Average rates applied across different account categories.

Switching back ​

Select Toggle Foreign Currency again to revert to the original currency presentation. The Financial Statements update accordingly.

Source ​

https://draftworx.helpjuice.com/en_US/cloud/draftworx-cloud-foreign-currency-translation

Walkthrough ​