Introduction
The consolidation process for the finance organizations could be as easy as a simple aggregation of data in a single currency organization to complex ownership structure in a multi-currency organization, multiple reporting standards, etc.
One of the functionalities available in most consolidation applications is the ability to make adjustment/reclass to close the books using a journal module (often referred to as “topsides”). The journal entry requirement could range from a simple reclass, unbalanced (one-sided entry) to entries in a currency different from the functional currency of an entity.
In legacy Oracle Hyperion Financial Management (HFM), one of the journal entry scenarios is the parent currency adjustment (PCA), which provides the ability to post an entry using the currency of the parent rather than an entity’s own functional/base currency.
While PCA allows you to skip the time-consuming effort required to figure out the why this type of entry is needed in the first place, the fact that a PCA entry inextricably tie the data intersection to parent and child entity makes reorganization difficult in the future.
And this is where Oracle FCC “Translated Currency Input” (TCI) journal entry functionality comes in. It provides the same functionality as PCA to post an entry in a different currency, while also removing the restrictions on “parent.child” entity requirement of HFM. The data intersection for the base entity is independent of the parent and re-organization of the entity structure in the future will not be impacted
FCC Configuration Requirements
The following steps are required to enable TCI in Oracle FCC
- Step 1 – Enable the consolidation member “Translated Currency Input” under Enable Features
- Step 2 – Create a new Data Source member with the same properties as the FCCS_Journal Input member with only the following unique changes
- Assign a currency to the new journal member. In the example below, a USD journal input member was created
Note: You can create as many of these new journal sources by currency as you need. I would however recommend that this is limited to the reporting currencies in FCC
Example of TCI journal entry in FCC
The example below shows the result of a TCI journal entry in FCC. Note that there is no reference to the parent entity in this journal. The only requirement is to specify the consolidation member and data source; Translated Currency Input and Journal Input_USD respectively
In this example, we have 2 data sources
• Managed Data = Baseline trial balance data for entity Germany (EUR) 25,000
• TCI journal using the Journal Input_USD data source member $5,000
• €25,000 = $29,606.5 – This is the translation of the baseline data
• $34,606.5 = The Translated base line data of $29,606.5 + The USD TCI journal amount of $5,000
From the example above, FCC Translated Currency Input journal is a significant improvement from the limitation of the legacy HFM PCA which by default joins parent and child at the hip, makes reorganization difficult and the data intersection invalid when a re-org takes place.