The reporting currency of a local subsidiary in Cognos Controller can be changed, but note that it requires some thought and planning, as well as change planning and testing. #
Begin by creating a new company in the currency you want the company to be reporting going forward
Do not change the currency belonging to the existing company code.
We recommend the new company addition is sat alongside its outgoing equivalent
You can pair both companies within a small group. This provides a single entity reference for the running of year on year comparatives.
Applying this change over a year end provides ease of accounting with the reconciliation of opening balances. The system has to roll forward closing balances. You want to roll forward consistent numbers and reconcile these at the same translated values in each period against the new reporting entity.
For example, you are switching from reporting on a GBP entity to a EUR entity. The closing balance on the GBP entity is £1,000 in the P&L reserve. This now appears as £1,000 within opening balances in the new financial year, as then reversed (say through reserve adjustments) to a zero carrying balance, matching the nil balance sheet position that should be reported on this outgoing company. The new EUR reporting entity will input a €1,200 entry on the same P&L reserve adjustment line with a forex rate that is fixed to the translation rate of 1.2. The adjustment reserve line generates equal and opposite entries that disclose nil impact to group reporting and the source GBP company returns a nil balance sheet. The new EUR entity will report numbers in the new operating currency with an opening position that has been reconciled with the source GBP entity.
Other considerations #
Lastly, you’ll need to consider all other areas that may be require attention as a result of this currency change, such as:
- the revision of data import settings, e.g. for flatfile import
- update of local security, including consideration of linked structures
- edit of existing report layouts
- journal update within the investment elimination template
- consideration of additional data complexity, e.g. from manual journal entries against the outgoing company code.