Murgese Consolidate Pilot
Other currencies, other year ends
A subsidiary that keeps its books in euros or dollars is translated into the group's currency at the group's own rates. A subsidiary whose year end is not the group's is brought in by either of the two routes FRS 102 allows.
- The group's own ratesRates are entered month by month for each currency, with the source of each, such as the group treasury circular. Nothing is fetched, because a consolidation translated at a rate the group did not circulate does not agree with anybody's management accounts. The same rates are used for every company.
- Closing, average and openingAssets and liabilities at the closing rate; income and expenses at the average, which is the mean of the twelve monthly rates rather than one rate typed in for the year; share capital and pre-acquisition reserves at the rate when they arose.
- The translation reserveThe exchange difference on translating a subsidiary goes to a reserve of its own, with the minority's share of it allocated to the non-controlling interest.
- Cash flows at the rates of their datesA foreign subsidiary's cash flows are translated at the rates at the dates of the cash flows, as FRS 102 paragraph 7.12 asks, rather than at the closing rate.
- Goodwill in the subsidiary's own currencyGoodwill on a foreign subsidiary is worked out in that company's own currency, as paragraph 30.23 requires. A subsidiary bought in euros with no rate entered for the day has no goodwill figure until there is one.
- A subsidiary with its own year endWhere a subsidiary's year end is not the group's, both routes paragraph 9.16 allows are there: interim accounts drawn to the group's date, or the company's own last accounts with the months in between entered as journals. The difference and the directors' reasons print in the basis of consolidation. A year end after the group's, or more than three months before it, is refused, because no route makes it allowed.
- Every month a company is translated atA company on its own year end in another currency has figures that start up to three months before the group's period, and the exchange rates screen asks for those months as well as the period's own, naming the company and saying why its months are different.
Murgese Consolidate, on a demonstration group. The group and every figure are invented.
Try it on a group you have already filed
The way to judge consolidation software is on a group whose accounts are signed: run it through and compare the result. Murgese Consolidate is not on general sale, and the pilot is the way in. It is free for the whole pilot, then a pilot tester's price, set out in writing before the pilot ends and held for two years from the day the licence starts.