Finance3/6/2020 12:00:00 AM

2 Min Demo: Constant Currency Reporting

Watch this video to learn how to accurately perform variance reporting for global organizations needing to understand how much of their reporting variance is due to performance versus FX fluctuations based on CCH Tagetik’s built-in functionality for Constant Currency Analysis.
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Transcript

Constant foreign exchange currency conversion is a useful practice to analyze and compare data across multiple years or versions — without having to worryabout the impact of FX rate fluctuations across those years.

Let's take a quick look.

Directly from the main homepage, it is possible to access a very simple constant FX analysis report that shows a very intuitive P&L variance analysis across two different scenarios.

In fact, as with any CCH Tagetik report, it is always possible to access the filters panel to understand the exact filters and dimensions of this report.

In this case, we are comparing our 2019 budget with our 2019 actuals, for the period ending in December, for a specific entity based in New York and a specific currency, which is US dollars.

As you can see from the rows below, the P&L shows a very simple comparison between your 2019 actuals,the 2019 budget expected performance and a variance.

This is where the constant analysis reporting capabilities of CCH Tagetik allow us tounderstand if this variance is due to operations — meaning pure performance — or if there is also an impact due to currency that needs to be taken into consideration.

Since we're looking at New York City in U.S.

dollars, the entire variance is purely operational variance across any item of my P&L.

Now, let's take a look at what happens if we change the currency from U.S.

dollars and refresh this report.As you can see, we now have our column for FX in-book populated.

This means that CCH Tagetik is translating the 2019 actuals to the sameFX budget that has been used for 2019 budget.

Actuals are translated at the same rate that we used in the budgeting season.The opposite can be done, where the budget rates are translated back to the actual rates in order to isolatethe currency effect and neutralize the FX impact.

Now, we are comparing apples-to-apples within the same currency.

I canappreciate that I have a variance for product sales between my budgeted versions and my actuals of around 4 million.

Of these 4 million, 3.9is actually due to performance; our team did not sell as much as expected.

Only $86,000 is actually out of control and due to the FX impact.
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