Currencies
Last updated
Last updated
Currency conversions in spreadsheets have traditionally been complex, but they are fully automated with Francis.
You might need to convert currencies if:
Your accounting system’s functional currency differs from the presentation currency you want to use for planning and reporting.
Your organization includes multiple legal entities with different functional currencies, requiring a unified presentation currency for consolidation, planning, and reporting.
Francis enables you to convert the currencies of actuals imported from connected data sources, streamlining consolidation, modeling, and reporting.
To enable currency conversion of actuals imported from connected accounting systems, add a currency data source via Settings > Integrations. You can choose between market rates or custom rates. All exchange rates are set monthly.
Market rates are automatically imported from the European Central Bank (ECB) and are the preferred choice for most users.
Monthly closing rates are imported directly from the European Central Bank.
Monthly average rates are calculated as the arithmetic mean of daily closing rates, i.e., the sum of the month’s daily closing rates divided by the number of days in the month.
If you need further details about the market data source, please contact us at support@francis.app.
Custom rates are manually entered and can be helpful if your organization is part of a larger group that uses standardized exchange rates.
For custom rates, you must specify a currency cross (e.g., EUR/USD) and input the monthly exchange rates.
The first exchange rate you input will be extrapolated backward. For instance, if your first entry is January 2020 at 7.5, all earlier periods (e.g., 2019, 2018, 2017, etc.) will use this rate for conversion.
Exchange rates are not extrapolated forward, so if you use custom rates, you must provide rates for each month up to your last closed month to ensure accurate conversions. If a rate is missing, actuals will default to an exchange rate of zero for that period.
Users provide both average and closing rates.
To convert actuals, go to the settings section for the relevant accounting connection.
Francis automatically detects the functional currency when importing data from an accounting system. You only need to specify the exchange rate data source and the target currency.
You must manually specify the functional currency for data from a Google Sheets source.
Francis follows the following method to convert currencies:
Income and (P&L) are translated using the average rates for the months in which they are presented. For practical reasons, a monthly average rate approximates the exchange rates at the transaction dates.
All accumulated assets, liabilities, and equity amounts are translated using the closing rates for the months in which they are presented.
Two effects result from this method that are important to note:
Balance sheet opening balances are translated to the month's closing rate, causing amounts to fluctuate even without new transactions. As a result, balance sheet amounts reflect both movements and exchange rate adjustments.
Example with "liability: long-term loan":
P&L transactions are translated using the month's average rate, but their corresponding entries on the balance sheet are translated using closing rates.
Example with "equity: retained Earnings":
IAS 21.42 stipulates that exchange rate differences (the two effects described above) related to equity should be presented as a separate equity component named “Other Comprehensive Income.” This differs from Francis' standard methodology but can easily be set up to comply with IAS21. You can refer to this guide if you wish to adopt this method.
