FCC’s Consolidation Process — Translation Level
In the last blog, we discussed about the first stage of the FCC’s Consolidation Process i.e., Local Currency.
Once the data has gone through all the Local Currency Level calculations, it is ready to dive into the world of Translation. And that’s our second stage — Translation.
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Translation (Represented in the application as Translated):
Translation stage represents the Entity level data on Parent Currency along with the Parent Currency Adjustments. The rules under the Translation stage get executed for the “FCCS_Entity Input”, “FCCS_Entity Consolidation” and “FCCS_Parent Input” members with “Parent Currency” combinations.
FCCS_Parent Input — is the member on which Parent level adjustments can be entered on an Entity. These adjustments don’t impact the books of the Entity but get considered while contributing the data to its Parent Entity.
The Translation process will happen for the “FCCS_Entity Input” and “FCCS_Entity Consolidation” members only.
“FCCS_Parent Input” member will not take part in the translation, but will get moved to the next steps using this Translation stage only. This member will go through any of the specific calculations written in this stage to impact it.
Note: FCCS_Parent Input Adjustments don’t get considered for the Reporting Currency Translations. Reporting Currency Translation happens on the FCCS_Entity Total member only and directly translates the numbers to the specific Reporting Currency.
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Following are the rules which come under the Translation Level of the Consolidation Process:
- Opening Balance Carry Forward —
The first layer of the Translation stage. This works same as the Opening Balance Carry Forward rule of Local Currency. The difference is just that, this rule is applicable for the translated values and the Parent Input Adjustments.
2. Default Translation —
Post the Opening Balance Carry Forward, the translation of the Periodic Activity happens from the Entity Currency to the Parent Currency/Reporting Currency.
Default Translation doesn’t happen on the basis of the Account Type in FCC. Instead of that, it happens on the basis of the Time Balance Property of the Account i.e., Balance or Flow.
Default Translation methods can be selected by following below steps —
a. Click on the Translation Override Rule (Yes, the default methods are selected here only)
b. Click on Manage Defaults
c. Select the required Default Translation Methods and click on Save
FCC also allows us to enter any Opening Balance Adjustments. In this stage only, we need to define that Opening Balance Adjustments will get translated with which rate — Prior Period Ending Rate or Prior Period Average Rate.
Note: Generally, Balance Sheet accounts are designed as Flow Time Balance property only; to facilitate the automated Cash Flow from Oracle FCC application and to have a proper flow of the translation along with FX/CTA calculations. In this situation, this stage translates the Periodic Activity of the Balance Sheet accounts with the Periodic Average Rate only and then the FX will get calculated on the same.
3. Translation Overrides —
Post the default translation, the translation overrides happen. Here, we can define any specific translations which should override the default translation and translates the data with either the Global/Local Rates or a specific rate.
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A detailed blog is already available on this topic — Translation Override Rules.
4. Before Foreign Exchange (FX) Calculations / FCCS_25 —
The first insertion rule under the Translation stage. This is known as FCCS_25. The calculations which need to be executed before system calculates FX and CTA, are configured here in FCCS_25.
5. Foreign Exchange (FX) Calculations —
Post the default translation and FCCS_25 calculations, system calculates the FX and pushes the data on the FX movements under the Movement dimension. This calculation facilitates the translation differences to sit in a different bucket to have a proper flow of the translated data using the Movement Dimension.
6. FX to CTA —
Once the FX is calculated, for all the Historical accounts, the FX gets transferred to the FCCS_CTA/FCCS_CICTA members. Since, the Historical accounts get translated using the Historical rates/spot rates of when the transaction actually happened; the FX/translation difference gets pushed to the CTA/CICTA member.
7. Calculate Movements —
This is the calculation layer similar to the Local Currency — Calculate Movements. This is applicable for the FCCS_Parent Input data which has been entered on the FCCS_ClosingBalance_Input to calculate the periodic movements of the same.
8. After Opening Balance Carry Forward / FCCS_30 —
Second insertion rule under the Translation stage. This is known as FCCS_30. Any calculations on the Parent Currency, which need to be executed post the above steps and before the Balance Sheet gets balanced (next step), are configured here in FCCS_30.
9. Balance the Balance Sheet —
Exactly similar to the same rule at the Local Currency stage. This is applicable for the Parent Input data. If it is disabled for all scenarios in the Local Currency stage, it will replicate the same behavior here as well.
10. Final Calculations / FCCS_40 —
The last insertion rule of the Translation stage before the data moves to the Proportion and Elimination. This is known as FCCS_40. This rule facilitates any calculation which should happen post all the above steps but before the data moves to the next layer of getting converted into the Contribution to the Parent entity.
11. Ratios —
If the system ratios are enabled, this stage calculates those ratios on the Parent Currency level.
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This was, how the Consolidation Process happens in FCC and in which sequence. We have discussed the second stage today i.e., Translation stage.
As discussed, FCCS_25, FCCS_30 and FCCS_40 are the insertion points to write the Essbase Calculation Scripts. Detailed blogs are already available on the Essbase Calculation Scripts —
1. Introduction to the World of Essbase Scripting
2. Writing Essbase Calc Scripts
3. Essbase Calc Scripts
Till the time we discuss the last stage of this Process,
Happy Learning!
Aditya
