Foreign-Denominated Accounts

In some situations, a company must manage all transactions associated with a particular account in a single currency. If your company needs to do this, you can identify the account as a foreign-denominated account, with a single currency that you specify.

Deltek ensures that all transactions posted to the foreign-denominated account are in the specified currency. For example, if your enterprise has a Tokyo bank account, all transactions involving that bank must be recorded in yen.

Tracking Currency Exchange Gains and Losses

Having foreign-denominated accounts creates the need to track gains and losses based on fluctuating exchange rates. For example, if a European company has a bank account denominated in United States dollars and the value of the euro rises against the United States dollar, the value in euros of that bank account balance drops. This results in an unrealized loss to the European company.

You can use the Gains/Losses and Revaluations process to calculate and post these types of currency exchange gains and losses, so that they appear on your financial statements according to the generally accepted accounting practices under which you operate.

Set Up Foreign Denominated Accounts

Designate an account as foreign denominated on the General tab of Settings > Accounting > Chart of Accounts:

• In the Currency field, select the currency for the account.

• If you want to post cash-basis entries for revaluation gains and losses, select Update Cash Basis during Revaluation. This option is only available if you are using cash-basis accounting.

• If you want to post gains that result from the Gains/Losses and Revaluations process to an account other than the default unrealized gains account on the Gains and Losses tab in Settings > Accounting > Company, enter that account number in the Revaluation Gain Account field.

• If you want to posts losses that result from the Gains/Losses and Revaluations process to an account other than the default unrealized losses account on the Gains and Losses tab in Settings > Accounting > Company, enter that account number in the Revaluation Loss Account field.

• If you are tracking multiple companies in Deltek, you can either set up foreign-denominated accounts on a company-by-company basis, or set up a single account that is available to all companies in your enterprise.