Custom Translation Rules and Forecast Rates for Financial Forecasting
Utilize custom translation rules to determine exchange rates for financial forecasting, covering scenarios such as splash presentation rejection, forecasted months, and remeasure/temporal translation. Explore options like setting up average and closing rate types, utilizing business rules, and custom rates for specific accounts.
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CUSTOM TRANSLATION: A SPLASH PRESENTATION REJECT Jenn & Chul
Custom Translation Rules Use these to: Return a specific rate regardless of account type Change the translation method from direct to periodic or vice versa Depending on your cube setting, the default translation can happen if it doesn t satisfy any of the conditions in the rule. You can turn off default translation and only use this rule
Use Cases Forecast rate examples: Use Actual rates for closed periods and the rates from the most recently closed period for the forecasted months Don t translate closed periods and use the rates from the most recently closed period for the forecasted months Don t translate closed periods and use the most recently closed period s Closing Rate for the forecasted months
Use Cases Remeasure/Temporal translation: Use average rates for specific balance sheet accounts and change translation method (direct to periodic or vice versa) Custom rates: Use a completely custom rate, entered via cube, to translate specific accounts
Forecast rates Requirement: Forecasted months translate at the most recent Actual rates
Forecast rates Option 1: Set up Average and Closing rate types for each scenario Create 22 separate rate types (assuming 11 forecast scenarios) Set the Cube FX settings on each scenario to False Assign corresponding rate types to each scenario Admin must enter/load rates for each rate type monthly for all currencies 1. 2. 3. 4.
Forecast rates Option 2: Use a business rule to reference the Actual rates where needed Write finance business rule Change cube settings: Change Translation Algorithm setting to Standard Using Business Rules for XF Rates Assign business rule to Business Rule 1 1. 2.
Forecast rates Option 1: Individual Rate Types Option 2: Business Rule Pros Cons Pros Cons Standard functionality Maintenance of rate types Standard functionality Rule writing required Rates are explicit Maintenance of entering rates for each rate type for each foreign currency No maintenance of rate types May be difficult for user to understand where the rate originates No maintenance of rates Cannot use for forecast months if they use a rate that isn t in the rate table
Forecast rates Option 2 We need an indicator that determines where the forecast months begin Scenario name No Input Periods Text field Global POV Three examples: Actual months translated, Forecast months @ Actual rates, Scenario name Only Forecast months @ Actual rates, No Input Periods Only Forecast months @ Actual closing rate, No Input Periods
Remeasure/Temporal translation Requirement: Certain balance sheet accounts for certain entities need to be translated at the Average rate using the Periodic method rather than at the closing rate using the Direct method.
Remeasure/Temporal translation Tag Entities and Accounts (ie. Text 1 = Remeasured)
Custom rates Requirement: Certain balance sheet accounts for certain entities need to be translated at a custom rate rather than the closing rate.
Questions? "It's idealistic, it's wonderful, it's a beautiful thing."
