Setup GL Accounts for Multi-Ledger and Multi-Currency
Overview
The below answers are based on a fictitious company that has:
Both US Ledger and CA Ledger.
US Ledger uses USD as the Base Currency
CA Ledger uses CAD as the Base Currency
The Consolidated Ledger uses USD as the Base Currency.
Frequently Asked Questions
Do you have a sample GL Account template?
See the attached file.
GoldFinch GL Accounts Template Multiple Ledgers Multiple Currencies 07072024.xlsx
Should I embed the GL Ledger code in the GL Account?
No. You should remove GL Ledger (CA or US) from GL Accounts. In GoldFinch, all GL Ledgers share the same GL Accounts. GoldFinch tracks GL Ledger codes in the GL Entry table.
How does GoldFinch track AR or AP for different GL Ledgers?
GoldFinch uses one AR and one AP GL Account. All US sales or purchases will go to the US Ledger and all Canadian sales or purchases will go to the CA Ledger. GoldFinch tracks GL Amount in the Ledger’s base currency code in the GL Entry table. GoldFinch tracks both GL Amount and Currency Amount in AR or AP sub-ledgers.
On the purchasing side, the CA ledger will have both CAD and USD transactions. How does GoldFinch convert USD to CAD GL Amount?
In the CA Ledger, both CAD and USD transactions are posted using CAD GL Amounts. USD amounts will be converted to CAD exchange rate of the Invoice Date when they are posted.
How does GoldFinch reevaluate Currency Amounts at the month’s end?
At the end of the month, you can reevaluate the open AR or AP amount in Currency Amounts to GL Amounts using the month-end exchange rate, then post the differences in GL Amount to Unrecognized Gain/Loss GL Account.
Since the Consolidated Ledger uses USD, we can set USD as the Currency for all GL Accounts. What about my CAD bank account in the US Ledger?
You should create a separate GL Account for the CAD bank account, with CAD as the Currency and USD as the Foreign Currency Code. GoldFinch will then track both the GL Amount and the Currency Amount in GL, and you can perform Bank Reconciliations using the CAD Amounts.
How do we consolidate the US Ledger and CA Ledger with different Base Currency Codes?
At the end of the month, you need to run a routine to convert the CAD Amounts in CA Ledger to USD Amounts first, using average, historical, or current exchange rates. The difference will be posted to a CTA (Currency Translation Adjustment) GL Account.
In the Chart of Accounts, under the Consolidation section, what should I enter for the Consolidation Rate Type?
According to GAAP, you should enter:
Consolidation Rate Type for Assets and Liability GL Accounts: Current
Owner’s Equity GL Accounts: Historical
Income Statement GL Accounts: Average
Should we import GL Accounts using the template or directly update the GL Accounts?
GoldFinch automatically creates GL Accounts and related setups using the post-installation scripts. It is easier and faster to manually update the existing GL Accounts instead of deleting them all and importing the new GL Accounts.