Financial statements converted to US dollars
Your parent company does not consolidate in pesos. If the financial statement arrives only in local currency, someone in Japan rebuilds it, and that work gets paid for twice and reviewed once.
- Peso to US dollar conversion of the balance sheet and income statement
- Exchange rate applied under the criterion your corporate office uses
- Currency effect identified and explained separately
- Your parent company's consolidation format, if it has one
- Explanation of the close in Japanese when your corporate office asks
Which exchange rate
It depends on your group's policy: closing rate, period average or historical by line item. I use the one your corporate office applies and leave the criterion documented, so consolidation does not have to ask every month.
The currency effect, kept separate
Variation from the exchange rate is identified apart from operating results. That is the difference between a month that looks bad and a month that looks bad because of the peso.
The meeting in Japanese
When the parent company has questions about the close, the explanation goes straight through, with no translator in between. The technical detail is lost exactly there: between an accrual and an expense there is no literal equivalence across the two accounting frameworks.
Tell me how you close today
A twenty minute call is enough to know whether I am useful to you. I will tell you what I would do differently and what it would cost, with no obligation and no sales pitch.