Sage 100 Multi-Currency Series: What is FASB 52 and How does DSD Multi-Currency address it?
As mentioned in my blog, What types of Sage 100 users have DSD Multi-Currency?, one of the features in the suite of DSD Multi-Currency modules is FASB 52 Reporting compliance. Before we dive into how DSD Multi-Currency accomplishes this, let’s first define what FASB 52 Reporting entails.
What is FASB 52?
For US corporations that have foreign subsidiary companies, the financial reporting for the subsidiary company must be reported two ways: (1) Financial reporting in functional currency (also referred to as base currency of local currency) to the local government, and (2) Financial reporting in translated US Dollars to the US government.
For more detail information on the actual FASB reference, select this link from the FASB website: https://www.fasb.org/summary/stsum52.shtml
Modern ERP/Accounting software systems can easily accomplish the first reporting need. It’s the second one that is trickier. In order to be compliant in this reporting, you must report some General Ledger Account data translated to US Dollars using the current exchange rate while other data is translated and reported in US Dollars at historical exchange rates.
What does this mean, exactly? Here are a few examples:
As you can see, it’s the accounts translated at the Historical Exchange Rate that prove to be more difficult to report. There is a FASB 52 exception that allows you to report these historical-valued accounts using an average monthly exchange rate, but luckily DSD’s Multi-Currency stores the FASB 52 historical rates for every General Ledger transaction, so you do not have to resort to using an average rate.
As far as which G/L Accounts use Current vs. Historical rates, P&L Accounts and Equity accounts use Historical valuation, while Assets & Liabilities use Current valuation. Note that there may be exceptions to certain accounts. Below is a sample account structure, with the FASB 52 Translation setting in the last column:
How does DSD Multi-Currency address FASB 52 Translation and Reporting?
First off, you would need the CUMC Multi-Currency Base Module and the GLMC General Ledger Multi-Currency enhancements installed to do FASB 52 Reporting. The CUMC Base Module allows for a user to define the FASB52 Currency (usually US Dollars) and associated daily exchange rates. The GLMC General Ledger Multi-Currency allows for the following:
For more information on the step-by-step setup of FASB 52 in DSD Multi-Currency, stay on the look out for my next blog: Your guide to setting up FASB 52 in DSD Multi-Currency.
DSD Business Systems has been a Sage Development Partner, commonly referred to as a “Master Developer”, for the past 30 years. DSD currently has over 400 Enhancements to Sage 100 ERP and has created thousands of custom solutions for end-users around the world. We have had the privilege of working with hundreds of Sage consultants, resellers, and end-users to produce powerful custom solutions that enhance the functionality of Sage 100 ERP.
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