Concept: Currency Translation

Workday translates amounts using account translation methods that you specify for each ledger account in an account translation rule set. You must configure account translation methods and account translation rule sets before you can use translations in financial reports.

You must also have translated beginning balances in all currencies that you want to report on. You can create these at year end by rolling forward translated beginning balances. When you roll forward, ensure that you select all currencies you want to report on.

You can specify a ledger account to use for cumulative translation adjustments (CTAs) on your account posting rules for translation gains and losses. Workday also provides separate posting rules for realized and unrealized gains and losses that appear on the Income Statement.

You can specify a translation currency and account translation rule set when you run:

Financial statements and consolidated financial statements.
Trial balance and consolidated trial balance.
Consolidated plan summaries and plan details.

You can run these reports in any currency in which you have exchange rates for conversion.

When you select a translation currency that is different to the company currency, Workday translates amounts from the company currency to the translation currency based on the account translation rule set you select. You can use the default translation rule set, or any other rule sets. When you select a translation currency that's the same as the company currency, Workday doesn’t translate amounts.

Workday translates each journal line based on the account translation method assigned to the ledger account on that journal line. Workday calculates whether the net impact is a translation gain or loss based on the total value of translated assets, liabilities, and equity. Workday then records a CTA line to either the translation gain or translation loss ledger account defined in the account posting rule set for the company. Workday generates CTA lines for each unique combination of:

Company.
Book code.
Period.
Balancing worktag (where applicable).

Note: Since beginning balances have their own period, Workday generates an additional CTA line for January 1 for beginning balances only, as well as the CTA line for other transactions for January 31.

When ledger accounts have transactions in other currencies, Workday translates the amount recorded in the company currency, not the transaction currency. To revalue journals recorded in currencies other than the company currency, access the

Run Revaluation

task. This task revalues transaction currency amounts into the ledger currency based on rules that you set up. These are posted entries.

When you run a financial report, Workday then translates those revalued amounts from their new ledger currency amount, but doesn’t store those translated amounts for future use. Instead, Workday recalculates the translated amounts each time you run a report.

Workday uses the next month's rate when reversing journals.

Example: A purchase accrual is posted at the end of April for an expense of 100 USD, which translates to 130 CAD. The accrual occurs because the supplier invoice arrived too late for the AP cutoff on the last calendar day of the month. You receive the invoice on May 3 and the invoice is posted on the same day. Since the average rate for May is 1.32 (USD to CAD), the resulting journal reversal is 132 CAD, and the invoice entered on May 3 also translates to 132 CAD. This is correct since there should be no translation difference on the expense line of the income statement due to a minor timing difference that results from the late receipt and entering of the invoice.

You can access report fields for translated amounts in these report data sources:

Journal Lines
Journal Lines for Financial Reporting