<?xml version="1.0" encoding="utf-8"?>
<ManualTopic ID="/baanerp/tf/onlinemanual/000516" xml:lang="en">
   <Header>
      <Title>FASB 52 Foreign currency translation</Title>
      <Keyword type="header" order="d1e1662335">
         <Level1>Foreign currency translation</Level1>
      </Keyword>
      <Keyword type="header" order="d1e1662338">
         <Level1>FASB 52</Level1>
      </Keyword>
   </Header>
   <AimSection>
      <Paragraph>FASB 52 is a guideline for foreign currency translation issued
		by the Financial Accounting Standards Board (FASB).</Paragraph>
      <Paragraph>You can perform FASB 52 currency translation for a specific rate
		type and specific ledger account. You must define translation adjustment
		schemes to link rate types to ledger accounts.</Paragraph>
   </AimSection>
   <GeneralSection>
      <SectionTitle>Using translation-adjustment schemes</SectionTitle>
      <Paragraph>You can use one
		translation adjustment schemes, or you can use two <Link href="/baanerp/tf/glossary/glossary#TranslAdjust_tf" role="glossary">translation-adjustment</Link> schemes one after the other:</Paragraph>
      <Paragraph>Currency 1 -&gt;
		[Translation Adjustment Scheme A] -&gt; Currency 2 -&gt;[Translation Adjustment
		Scheme B] -&gt; Currency 3</Paragraph>
      <Paragraph>LN retrieves the currency rates from the <GUIRef href="/baanerp/tc/mcs/tcmcs0108m000" role="session">Currency Rates (tcmcs0108m000)</GUIRef> session.</Paragraph>
      <Paragraph>However, if you use two translation adjustment schemes, you must
		define the currency rates for the rate types of the <Emphasis>second</Emphasis> translation adjustment scheme in the <GUIRef href="/baanerp/tf/gld/tfgld5106m000" role="session">Additional Currency Rates (tfgld5106m000)</GUIRef> session.</Paragraph>
      <Paragraph>In addition, if you use a dependent currency system AND the
		currency base (input currency) is the <Link href="/baanerp/tc/glossary/glossary#000017" role="glossary">reference currency</Link>, you must
		also define the currency rates for the rate types of the <Emphasis>first</Emphasis> translation adjustment scheme in the <GUIRef href="/baanerp/tf/gld/tfgld5106m000" role="session">Additional Currency Rates (tfgld5106m000)</GUIRef> session.</Paragraph>
      <List>
         <ListTitle>Note</ListTitle>
         <ListIntro>If you use a independent currency system, the input currency
		  must not be the same as one of the following currencies:</ListIntro>
         <ListItem>Local currency</ListItem>
         <ListItem>Reporting currency 1</ListItem>
         <ListItem>Reporting currency 2</ListItem>
      </List>
   </GeneralSection>
   <GeneralSection>
      <GeneralSection>
         <Paragraph>The calculated
		  adjustment amounts are saved on the defined ledger account.</Paragraph>
         <Note>
            <SectionTitle>Note</SectionTitle>
            <Paragraph>The balance amount
			 of all profit and loss accounts is booked according to the parameters set in
			 the <GUIRef href="/baanerp/tf/gld/tfgld0503m000" role="session">Company Parameters (tfgld0503m000)</GUIRef> session.</Paragraph>
         </Note>
         <Paragraph>Depending on the
		  balance method, the balance amount is posted to one or more accounts. There are
		  no transactions posted to period zero, which is the opening balance.</Paragraph>
      </GeneralSection>
      <GeneralSection>
         <SectionTitle>Example</SectionTitle>
         <Paragraph>The following calculations can be required for an <Link href="/baanerp/tf/glossary/glossary#Fasb52_tf" role="glossary">FASB 52</Link> foreign currency translation:</Paragraph>
         <TABLE border="1" borderstyle="default" space-and-orientation="indented-estimated">
            <THEAD noTR="1">
               <TR no="1" isLast="true">
                  <TD rowspan="1" colspan="1"> </TD>
                  <TD rowspan="1" colspan="1">Input currency</TD>
                  <TD rowspan="1" colspan="1">Output
				  currency</TD>
               </TR>
            </THEAD>
            <TBODY noTR="2">
               <TR no="1" isLast="false">
                  <TD rowspan="1" colspan="1">Translation Adjustment Scheme
				  A</TD>
                  <TD rowspan="1" colspan="1">Local currency</TD>
                  <TD rowspan="1" colspan="1">Functional
				  currency</TD>
               </TR>
               <TR no="2" isLast="true">
                  <TD rowspan="1" colspan="1">Translation Adjustment Scheme B</TD>
                  <TD rowspan="1" colspan="1">Functional
				  currency</TD>
                  <TD rowspan="1" colspan="1">Currency for FASB reporting</TD>
               </TR>
            </TBODY>
         </TABLE>
         <Paragraph>where:</Paragraph>
         <Paragraph>Input/output currency = the source and target
		  currency.</Paragraph>
         <Paragraph>Local currency = for example, the subsidiary's local
		  currency.</Paragraph>
         <Paragraph>Functional currency = the most frequently used currency in the
		  organization. For example, if 70% of your sales is expressed in EUR, this is
		  the functional currency.</Paragraph>
         <Paragraph>Currency for FASB reporting = one of the home currencies of
		  the holding company, for example, USD.</Paragraph>
      </GeneralSection>
   </GeneralSection>
   <RelatedTopics>
      <SectionTitle>Related topics</SectionTitle>
      <RelTopic>
         <Link href="/baanerp/tf/onlinemanual/000517" role="manual">To set up and perform FASB 52 Foreign currency translation</Link>
      </RelTopic>
   </RelatedTopics>
</ManualTopic>