Calendar
Ledger Setups and Configuration Steps
- Create Calendar
- Create Rate Types
- Configure Accounting Flexfield
- Create Accounting Flexfield Structure
- Create Value Sets
- Populate the Value Sets
- Create Legal Entity
- Create an Address
- Create Ledger
- Update Profile GL Responsibilities
- Open First Period
- Test Journal Entry for the Ledger
Companies
0010 – Makro Parent
1010 – Makro US Parent
1011 – Makro US Holding
1021 – Makro US Distribution
1031 – Makro US Operations
2010 – Makro EU Parent
2011 – Makro EU Holding
2021 – Makro EU Distribution
2031 – Makro EU Operations
Cost Centers
0000 – N/A
1000 – Admin (Parent: None): The Admin cost center manages general administrative functions and overhead expenses within the organization. It encompasses activities related to management, human resources, legal, and other administrative tasks, ensuring smooth operations and effective resource allocation.
1111 – Management (Parent: 1000 – Admin): The Management cost center includes activities related to executive leadership and decision-making within the organization. It involves strategic planning, policy formulation, and overall direction to achieve the company’s goals and objectives.
1211 – FICO (Parent: 1000 – Admin): The FICO cost center focuses on financial management, accounting, and controlling activities. It oversees financial transactions, budgeting, financial reporting, and ensures compliance with accounting standards and regulatory requirements.
1311 – IT Services (Parent: 1000 – Admin): The IT Services cost center manages technology infrastructure and support services. It handles activities related to IT services, software licenses, hardware maintenance, and ensures the smooth functioning of the organization’s technology systems.
1411 – HR (Parent: 1000 – Admin): The HR (Human Resources) cost center is responsible for managing human capital within the organization. It encompasses activities such as recruitment, employee onboarding, training, performance management, and employee relations.
1511 – Facilities and Maintenance (Parent: 1000 – Admin): The Facilities and Maintenance cost center oversees the maintenance and upkeep of company facilities. It manages activities related to building maintenance, utilities, office space leasing, and ensures a safe and conducive work environment.
1611 – Marketing and Sales (Parent: 1000 – Admin): The Marketing and Sales cost center focuses on promoting and selling products or services. It includes activities such as advertising, sales team management, market research, and promotional events to drive revenue and brand awareness.
Locations
00000 N/A
10000 USA P
10011 Dallas
10021 Atlanta
20000 EU P
20011 Amsterdam
20021 Hamburg
Natural Accounts
Retained Earnings: Definition: Retained Earnings, also known as accumulated earnings or retained profits, is a financial account that represents the accumulated net profits of a company that have been retained within the business instead of being distributed as dividends to shareholders. It reflects the portion of the company’s earnings that have been reinvested back into the business for various purposes, such as expansion, debt reduction, or future investments. Retained Earnings is a crucial indicator of a company’s financial health and its ability to fund growth and sustain operations over time.
Cumulative Translation Adjustment: Cumulative Translation Adjustment (CTA) is an account in the equity section of a company’s financial statements that records the cumulative impact of changes in exchange rates on foreign currency-denominated financial statements of subsidiaries or branches. CTA arises due to fluctuations in exchange rates between the functional currency of a subsidiary and the reporting currency of the parent company. CTA reflects the effects of currency translation on the financial performance and position of a multinational company’s foreign operations.
Revalution vs Translation
Currency Revaluation: Currency revaluation refers to the process of adjusting the value of assets and liabilities denominated in foreign currencies to reflect changes in exchange rates. This adjustment aims to accurately value these assets and liabilities based on the current exchange rates. Currency revaluation provides a true and fair view of the financial position of a company, especially when dealing with fluctuating exchange rates. It is a common practice for companies engaged in international business to revalue their foreign currency-denominated accounts periodically to reflect the impact of currency fluctuations.
Currency Translation: Currency translation involves converting financial statements or accounts denominated in one currency to another currency, typically the reporting currency of a parent company. This process is essential for consolidating the financial results of foreign subsidiaries or branches into the reporting currency, allowing for a comprehensive view of the overall financial performance of a multinational organization. Currency translation takes into account the exchange rate at which the conversion is performed, and it helps present a consistent view of financial data for consolidated reporting purposes.
Differences: Currency revaluation and currency translation are related concepts, but they serve different purposes in financial accounting. Currency revaluation primarily deals with adjusting the value of individual foreign currency-denominated assets and liabilities to reflect changes in exchange rates. This is done to ensure that these items are stated at their current market value. On the other hand, currency translation involves converting the entire financial statements of foreign entities, including income, expenses, assets, and liabilities, from their functional currency to the reporting currency of the parent company. Currency translation is essential for consolidating financial results across different entities and provides a holistic view of the organization’s financial performance. While currency revaluation focuses on specific accounts, currency translation encompasses the entirety of financial statements. Both processes play critical roles in accurately representing the financial position and performance of a multinational company in the context of varying exchange rates.
Period Average Rate:
The Period Average Rate refers to the average exchange rate that is calculated over a specific accounting period, typically a month, quarter, or year. This rate is derived by averaging the exchange rates that were in effect during the entire period. It is commonly used for financial reporting purposes to convert foreign currency transactions or balances into the reporting currency for a given period. The Period Average Rate provides a smoothed representation of exchange rate fluctuations over the specified time frame.
Period End Rate:
The Period End Rate, also known as the closing rate, is the exchange rate at the end of a specific accounting period. It is the rate at which foreign currency transactions or balances are converted into the reporting currency as of the last day of the period. The Period End Rate is often used for financial statement preparation and reporting to reflect the exchange rate in effect at the end of the reporting period.
