Currency translation methods for consolidating financial statements
The equity part of the balance sheet is translated at the historical exchange rate of the transaction.
Additionally, the foreign currency monetary amounts are reported at the closing rate and the non-monetary items are carried at the exchange rate at the moment of the transaction. (consolidation credit account) fields to let Microsoft Dynamics NAV know where we want the transactions mapped to in cases of negative or positive amount. Since account 2910.1 Cash is a Balance Sheet account, we choose the Closing Rate consolidation translation method.
We will not concentrate on the legal and accounting aspects, but rather try to review the Microsoft Dynamics NAV role in this process.
In Microsoft Dynamics NAV, all kinds of legal entities that need to be consolidated to a parent company are called business units (BU).
The summary of financial information is referred to as the consolidated financial statements.In this article, we will review the fundamentals of financial statements consolidation process in Microsoft Dynamics NAV.