Foreign Currency Translation Configuration Setup

Overview

Foreign Currency Translation is used to convert the subsidiary in a foreign currency (Ledger currency) into the currency of the parent company (Presentation currency), which is a part of the Financial Reporting Consolidations process. This article provides information about the configuration setups that need to be completed before translations can be processed.

Prerequisites

Foreign Currency Translation is only available for the Lightning UI.
Multi-currency must be enabled.
Setup Consolidations must be completed.

Do you want to:

Update the CTA (Cumulative Translation Adjustment) GL Account
Update Global Picklist Value Set- Currency
Update Global Picklist Value Set- Rate Types
Select a Rate Type for each GL Account
Add the Exchange Rates tab to the Accounting App

Update the CTA (Cumulative Translation Adjustment) GL Account

The CTA (Cumulative Translation Adjustment) GL Account is used as a plug to balance the Trial Balance after translating using various exchange rates. Using a CTA GL Account is a common practice for any business doing Foreign Currency Translation. Refer to the information below related to configuring a CTA GL Account:

New Accounting Seed user - when Multi-currency is enabled, a new CTA GL Account will automatically be added to the Default GL Accounts screen. The new GL Account number will be 3150-Cumulative Translation Adjustment. As a new user, you will have the option to use the selected CTA GL Account or create a new one. If a new one is created, it will need to be replaced with the existing one that was automatically created and added to the Default GL Accounts screen. Use the steps below to update the CTA GL Account.
Existing Accounting Seed user - with Multi-currency enabled, you can search for and select the 3150-Cumulative Translation Adjustment (CTA) GL Account in the Default GL Accounts screen. Or, search for and select an existing CTA GL Account that you previously created. Otherwise, create a new CTA GL Account. Then, access the Default GL Accounts screen to update the newly created CTA GL Account.
Important: If you select an existing GL Account or create a new one to use as the CTA GL Account, it must be an Equity GL Account.

(Optional) Create a new CTA GL Account. Refer to the Create a New GL Account article for more information.
Access the Default GL Accounts screen to select and update the CTA GL Account.
Click the Pencil icon to edit information on this screen.
From the CTA GL Account field, search for and select the newly created CTA GL Account.
Click Save.

The CTA GL Account entered here will be available to display on Financial Reports.

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Update Global Picklist Value Set - Currency

The Salesforce Global Picklist Value Set for Currency will need to be updated to include all of the three-letter alphabetic ISO (International Organization for Standardization) currency codes that will be used by your organization (org).

Important: The Picklist Value Set will need to be updated by both new and existing Accounting Seed users.

Click the Gear icon and select Setup.
From the Quick Find search textbox, enter Picklist and then, select Picklist Value Sets.
Select Currency. Then, review the existing Values.
Note: If any of your ISO foreign currency codes are missing, they will need to be added.

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To add an ISO currency code, click New.
Add the new value. Then, select the Add the new picklist values to all Record Types that use this Global Value Set checkbox.
Note: More than one ISO currency code can be added at the same time. Press Enter after each code to add another one. In the sample screen below CAD was added for the Canadian dollar and JPY was added for the Japanese yen.

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Click Save. The new ISO codes are now included as Picklist Values.

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Update Global Picklist Value Set - Rate Types

Two Rate Types (Current and Monthly Average) will automatically be included in the Picklist Value Set. If you use any additional rate types when translating your foreign currency balances, they will need to be added. For example, a Historical or Cumulative Historical Rate Type could be added.

Rate Types can include some of the following:

C - Current (rate everyday for the entire month)
H - Historical
C/H - Cumulative Historical
w/Avg - Weighted Average
DL = Date of Loan

Select Rate Type.
Note: If you are not continuing from the section above, click the Gear icon and select Setup. Enter Picklist in the Quick Find search textbox and select Picklist Value Sets. Then, select Rate Type.

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To add a new Rate Type, click New.
Add the new value. Then, select the Add the new picklist values to all Record Types that use this Global Value Set checkbox.
Note: More than one Rate Type can be added at the same time. Press Enter after each type to add another one.

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Click Save. The new values display on the list.

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Select a Rate Type for each GL Account

After completing the Global Picklist Value Set - Rate Types setup, a rate type needs to be selected for each and every GL Account.

Important: When you Run Consolidations, and the automatic background Foreign Currency Translation process starts, if any GL Account is missing a rate type, the Run Consolidations process will fail.

In order to select a rate type on a GL Account record, both new and existing Accounting Seed users will need to add the Rate Type field onto the page layout.

Best Practice:: We recommend that before adding the Rate Type field, you should add a new section onto the GL Account page layout that is named “FX Translation.” This will be an easy way to clearly identify the section and rate type for Foreign Currency Translation on a GL Account.

Use the steps below to add the new section, select the Rate Type field, and select a rate type for a GL Account.

With a GL Account record displayed, click the Gear icon and select Edit Object.
Click Page Layouts and select the GL Account Layout.

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Drag and drop the Section field onto the page layout.

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Enter FX Translation as the Section Name.

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Click OK. The new section displays on the page layout.

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Drag and drop the Rate Type field onto the page layout in the new FX Translation section.

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Click Save.
Refresh the GL Account record. The new FX Translation section with the Rate Type field displays on the page.

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To select a Rate Type for this GL Account, click Edit.
From the Rate Type drop-down list, select the appropriate rate type for this GL Account.
Note: All of the rate types that were added in the Global Picklist Value Set - Rate Types setup will be available from the drop-down list.
Click Save.
Continue to select rate types for each and every GL Account.
Important: Remember that each GL Account number must have a rate type selected. When you Run Consolidations, and the automatic background Foreign Currency Translation process starts, if any GL Account is missing a rate type, the Run Consolidations process will fail.

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Add the Exchange Rates tab to the Accounting App

The Exchange Rates tab that is used in conjunction with Foreign Currency Translation is accessible from the App Launcher. In the search textbox, search for and select Exchange Rates.

An App Navigation item can also be added to access the Exchange Rates tab. That way, rather than searching for this tab each time from the App Launcher, it will automatically be available as part of your navigation bar. Use the steps below to add an App Navigation item.

From the Accounting app, click the Pencil icon to personalize your navigation bar.
Click Add More Items.
Select All and search for Exchange Rates.
Click the + (plus sign) to select Exchange Rates.
Click Add 1 New Item. The new item displays at the bottom of the list.
To change the display order, select the new item and drag it up or back down to rearrange.
Click Save. The Exchange Rates tab is now available from your navigation bar.

Note: Depending upon the number of items that are already available on your navigation bar and the order arrangement, you might need to click the More drop-down list on the navigation bar to view and select the new Exchange Rates tab.