Using Multicurrency in Deltek Vantagepoint

With Vantagepoint Multicurrency, transactions like employee expenses or accounts payable vouchers can be entered in any selected currency regardless of the company’s functional currency. Your firm can provide invoices to clients in foreign currencies as well. In a multicompany database, any company in the enterprise can be maintained in any currency. Deltek Vantagepoint holds the key to simplifying this process for your firm.

Vantagepoint Multicurrency allows you to:

• Manage multiple currencies for transactions, accounting, and financial reporting
• Enter and manage exchange rates, which can be done manually or can be automated to update daily exchange rates using an auto-feed subscription provided by XE.com.
• Support daily, period, and period-end exchange rate changes
• Revalue foreign currency accounts and automatically identify realized and unrealized gains or losses due to currency fluctuations

Considerations when Using Deltek Vantagepoint Multicurrency

With any changes to your standard accounting practices, there are always some items that need to be taken into consideration:

Revenue Considerations: Revenue generation will now use the billing currency fields in the project hub.

Project Considerations: Once you set a project’s currency and the project has transactions posted to it, the currency code cannot be changed on the project. It is very important to set the project to the correct currency upon initial setup. All lower levels of the work breakdown structure (WBS) will follow the currency codes set at the project level. A project’s currency can be set up to manage the project in one currency and a different billing currency can be used to invoice your client.

General Ledger Account Considerations: In Vantagepoint Multicurrency accounts can be left without a specific currency or set to a single currency. For example, a company with a functional currency of USD may have a checking account in Canadian dollars (CAD). In this example, the chart of account numbers associated with the Canadian Bank Code would need to be set up with a currency code of CAD. Once an account is set up in a currency that is different than the functional currency of the company, it is then considered a foreign-denominated account and will be included in the revaluation process.

Unit Considerations: You must specify both a project and billing currency.

Vendor Considerations: Vendor records are stored in the functional currency of the active company. There are several details to note for vendor records:

• Functional Currency – the home currency or the currency in which the company operates
• Transactional Currency – the currency in which a transaction is entered into Vantagepoint
• Presentation Currency - used in reporting to generate a report with all amounts expressed in a single currency
• Billing Currency - the currency used to generate invoices and billing reports for specific projects and their WBS
• Project Currency – the currency in which the project is managed which can be different than the functional currency when needed (this currency should be used for all project management purposes including reporting)
• Payment Currency – the currency in which the payments are made
• Consolidated Reporting Currency – only available in a Multicompany environment and is used to create consolidated financial statements for multiple companies that are using different functional currencies currency directly through the account setup of the GL (if you specify an account currency that is different from the company’s functional currency, the account is then considered a foreign-denominated account)
• Account Currencies – each account set for use as a bank account and mapped to a GL code can be set to a specific
• Tax Currency – if tax auditing is enabled then a currency must be set for each tax code (this is generally the currency in which you report and pay the tax amounts to the proper tax authority)

Generally Accepted Accounting Practices in Deltek Vantagepoint Multicurrency

Deltek Vantagepoint Multicurrency complies with the Accounting Standards Codification (ASC) sections ASC-830-10-55-10 and 11. In section 55-10, the guideline states that it is acceptable to use averages or other methods of approximation. Accordingly, it is recommended to use a weighted average of the exchange rate for a period rather than applying actual day-to-day fluctuations.

Furthermore, section 55-11 states that the average rates used shall be appropriately weighted by the volume of functional currency transactions occurring during an accounting period. In other words, to translate revenue and expense accounts for an annual period, individual revenue and expense accounts for each quarter or month may be translated at that quarter's or that month's average rate. The translated amounts for each quarter or month should then be combined with the annual totals.

Why Use Multicurrency in Deltek Vantagepoint?

Multicurrency can be used for 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. Using Multicurrency allows you to use the Gains/Losses and Revaluations process in Vantagepoint to calculate and post these currency exchange gains and losses. As a result, they appear on your financial statements per the generally accepted accounting practices under which you operate.