Views: 15<\/p>
Nobuyuki SAMBUICHI<\/p>\n<\/div>\n
ISO\/TC295 Audit data services<\/a>\/SG1 Semantic model Convener<\/p>\n<\/div>\n The AICPA (American Institute of Certified Public Accountants) has established a way to connect specific fields in a standard table file with elements in an XML format called XBRL-GL. This is done to facilitate audits and data collection processes.<\/p>\n<\/div>\n The AICPA has created a set of standards known as the Audit Data Standard (ADS), which outlines how each element in the data should be connected to the XBRL-GL format. Additionally, the ISO 21378:2019 Audit Data Collection (ADC) standard was developed with strong support from the AICPA ADS.<\/p>\n<\/div>\n To create a clear and meaningful model for the ISO 21378 standard, it is important to establish a mapping between the ADC and XBRL-GL formats. This mapping specifies how the elements in ADC relate to the elements in XBRL-GL.<\/p>\n<\/div>\n<\/div>\n<\/div>\n Below is a table that provides the specific mappings between the elements in ADC and XBRL-GL.<\/p>\n<\/div>\n No.<\/p>\n<\/td>\n Name<\/p>\n<\/td>\n Datatype<\/p>\n<\/td>\n Level<\/p>\n<\/td>\n ADS<\/p>\n<\/td>\n XBRL-GL<\/p>\n<\/td>\n<\/tr>\n 1<\/p>\n<\/td>\n Journal_ID<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Journal_ID<\/p>\n<\/td>\n gl-cor:entryNumber<\/p>\n<\/td>\n<\/tr>\n 2<\/p>\n<\/td>\n Journal_Number<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n gl-cor:uniqueID<\/p>\n<\/td>\n<\/tr>\n 3<\/p>\n<\/td>\n GL_Account_Number<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n GL_Account_Number<\/p>\n<\/td>\n gl-cor:accountMainID<\/p>\n<\/td>\n<\/tr>\n 4<\/p>\n<\/td>\n Fiscal_Year<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Fiscal_Year<\/p>\n<\/td>\n gl-bus:fiscalYearEnd Note that gl-bus:fiscalYearEnd is at a higher level of the XBRL GL hierarchical structure than the detail lines are, an efficient structuring would include pre-grouping by bus:fiscalYearEnd<\/p>\n<\/td>\n<\/tr>\n 5<\/p>\n<\/td>\n Accounting_Period<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Period<\/p>\n<\/td>\n gl-bus:postingCode<\/p>\n<\/td>\n<\/tr>\n 6<\/p>\n<\/td>\n Effective_Date<\/p>\n<\/td>\n Date<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Effective_Date<\/p>\n<\/td>\n gl-cor:postingDate<\/p>\n<\/td>\n<\/tr>\n 7<\/p>\n<\/td>\n Journal_Line_Number<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Journal_ID_Line_Number<\/p>\n<\/td>\n gl-cor:lineNumber<\/p>\n<\/td>\n<\/tr>\n 8<\/p>\n<\/td>\n JE_Type_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n gl-cor:entriesType<\/p>\n<\/td>\n<\/tr>\n 9<\/p>\n<\/td>\n JE_Header_Description<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n JE_Header_Description<\/p>\n<\/td>\n gl-cor:entryComment<\/p>\n<\/td>\n<\/tr>\n 10<\/p>\n<\/td>\n JE_Line_Description<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n JE_Line_Description<\/p>\n<\/td>\n gl-cor:detailComment<\/p>\n<\/td>\n<\/tr>\n 11<\/p>\n<\/td>\n Source_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Source<\/p>\n<\/td>\n gl-cor:SourceJournalID (fixed\/enumerated list) or gl-cor:sourceJournalDescription (free form)<\/p>\n<\/td>\n<\/tr>\n 12<\/p>\n<\/td>\n Bill_Number<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:documentNumber<\/p>\n<\/td>\n<\/tr>\n 13<\/p>\n<\/td>\n Bill_Type_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:documentType<\/p>\n<\/td>\n<\/tr>\n 14<\/p>\n<\/td>\n Bill_Date<\/p>\n<\/td>\n Date<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:documentDate<\/p>\n<\/td>\n<\/tr>\n 15<\/p>\n<\/td>\n Quantity<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-bus:measurableQuantity<\/p>\n<\/td>\n<\/tr>\n 16<\/p>\n<\/td>\n UOM_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-bus:measurableUnitOfMeasure<\/p>\n<\/td>\n<\/tr>\n 17<\/p>\n<\/td>\n Unit_Price<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-bus:measurableCostPerUnit<\/p>\n<\/td>\n<\/tr>\n 18<\/p>\n<\/td>\n Functional_Amount<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Amount<\/p>\n<\/td>\n gl-cor:amount<\/p>\n<\/td>\n<\/tr>\n 19<\/p>\n<\/td>\n Functional_Currency_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Amount_Currency<\/p>\n<\/td>\n gl-muc:amountCurrency<\/p>\n<\/td>\n<\/tr>\n 20<\/p>\n<\/td>\n Reporting_Amount<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Reporting_Amount<\/p>\n<\/td>\n gl-cor:amountTriangulationAmount<\/p>\n<\/td>\n<\/tr>\n 21<\/p>\n<\/td>\n Reporting_Currency_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Reporting_Amount_Currency<\/p>\n<\/td>\n gl-muc:amountTriangulationCurrency<\/p>\n<\/td>\n<\/tr>\n 22<\/p>\n<\/td>\n Local_Amount<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Local_Amount<\/p>\n<\/td>\n gl-muc:amountOriginalAmount<\/p>\n<\/td>\n<\/tr>\n 23<\/p>\n<\/td>\n Local_Currency_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Local_Amount_Currency<\/p>\n<\/td>\n gl-muc:amountOriginalCurrency<\/p>\n<\/td>\n<\/tr>\n 24<\/p>\n<\/td>\n Transaction_Amount<\/p>\n<\/td>\n Decimal<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 25<\/p>\n<\/td>\n Transaction_Currency_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 26<\/p>\n<\/td>\n Settlement_Method_Code<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 27<\/p>\n<\/td>\n Credit_Debit_Indicator<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Amount_Credit_Debit_Indicator<\/p>\n<\/td>\n gl-cor:debitCreditCode<\/p>\n<\/td>\n<\/tr>\n 28<\/p>\n<\/td>\n Reversal_Indicator<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Reversal_Indicator<\/p>\n<\/td>\n gl-usk:reverse true = entry is to be reversed false with gl-usk:reversingDate = provided = entry is a reversal not provided = none of the above.<\/p>\n<\/td>\n<\/tr>\n 29<\/p>\n<\/td>\n Reversal_Journal_ID<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Reversal_Journal_ID<\/p>\n<\/td>\n gl-usk:reversingStdId<\/p>\n<\/td>\n<\/tr>\n 30<\/p>\n<\/td>\n Cancellation_Sign<\/p>\n<\/td>\n Boolean<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 31<\/p>\n<\/td>\n Created_User_ID<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Entered_By<\/p>\n<\/td>\n gl-cor:enteredBy<\/p>\n<\/td>\n<\/tr>\n 32<\/p>\n<\/td>\n Created_Date<\/p>\n<\/td>\n Date<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Entered_Date<\/p>\n<\/td>\n gl-cor:enteredDate<\/p>\n<\/td>\n<\/tr>\n 33<\/p>\n<\/td>\n Created_Time<\/p>\n<\/td>\n Time<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Entered_Time<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 34<\/p>\n<\/td>\n Approved_User_ID<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Approved_By<\/p>\n<\/td>\n gl-cor:entryResponsiblePerson<\/p>\n<\/td>\n<\/tr>\n 35<\/p>\n<\/td>\n Approved_Date<\/p>\n<\/td>\n Date<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n Approved_Date<\/p>\n<\/td>\n gl-usk:nextDateRepeat<\/p>\n<\/td>\n<\/tr>\n 36<\/p>\n<\/td>\n Posted_User_ID<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n<\/tr>\n 37<\/p>\n<\/td>\n Account_Segment_Employee<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:accountSubID withgl- cor:accountSubType of \u201cProject\u201d<\/p>\n<\/td>\n<\/tr>\n 38<\/p>\n<\/td>\n Account_Segment_Project<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:accountSubID withgl- cor:accountSubType of \u201cank Account\u201d<\/p>\n<\/td>\n<\/tr>\n 39<\/p>\n<\/td>\n Account_Segment_Bank_Account<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:accountSubID withgl- cor:accountSubType of \u201cccount Segment\u201d<\/p>\n<\/td>\n<\/tr>\n 40<\/p>\n<\/td>\n Account_Segment_X<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 2<\/p>\n<\/td>\n gl-cor:accountSubID withgl- cor:accountSubType of \u201cBusiness_Unit\u201d<\/p>\n<\/td>\n<\/tr>\n 41<\/p>\n<\/td>\n Business_Segment_X<\/p>\n<\/td>\n String<\/p>\n<\/td>\n 1<\/p>\n<\/td>\n Business_Unit_Code<\/p>\n<\/td>\n gl-cor:accountSubID withgl- cor:accountSubType of \u201cBusiness_Unit\u201d<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Last_Modified_By<\/p>\n<\/td>\n gl-bus:enteredByModified<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Last_Modified_Date<\/p>\n<\/td>\n gl-usk:lastDateRepeat<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Segment01<\/p>\n<\/td>\n XBRL GL tracks hierarchy ID, hierarchy description, and hierarchy type, so it can track code NA, description N. America, and type global area usinggl-cor:accountSubID,gl-cor:accountSubDescription, andgl-cor:accountSubType, respectively. Interrelations and hierarchies are captured bygl-cor:parentSubAccountType (What is the hierarchy type this unit rolls up to?).<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Segment02<\/p>\n<\/td>\n See above<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Segment03<\/p>\n<\/td>\n See above<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Segment04<\/p>\n<\/td>\n See above<\/p>\n<\/td>\n<\/tr>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n –<\/p>\n<\/td>\n Segment05<\/p>\n<\/td>\n See above<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/div>\n What is the European Triangular currency?<\/p>\n<\/div>\n In Europe, the term “triangular amount” refers to a method of calculating the local currency equivalent of a transaction involving three currencies. It is commonly used when there is a transaction between two entities in different countries, and a third currency is involved as an intermediary or reference currency.<\/p>\n<\/div>\n Here’s how it works:<\/p>\n<\/div>\n Functional Currency: Each entity involved in the transaction has its own functional currency, which is the primary currency used for its financial reporting and operations.<\/p>\n<\/li>\n Transaction Currency: The currency in which the transaction is denominated or conducted. This is the currency mentioned in the transaction document, such as an invoice.<\/p>\n<\/li>\n Triangular Currency: This is the third currency used as a reference point to calculate the local currency equivalent of the transaction. Often, the euro is used as the triangular currency in Europe due to its widespread use and stability.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n To determine the triangular amount in Europe, the following steps are typically followed:<\/p>\n<\/div>\n Convert Transaction Currency to Triangular Currency: The transaction currency amount is converted to the triangular currency using the applicable exchange rate between the two currencies.<\/p>\n<\/li>\n Convert Triangular Currency to Local Currency: The triangular currency amount obtained in the previous step is further converted to the local currency using the exchange rate between the local currency and the triangular currency.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n By performing these currency conversions, the triangular amount represents the local currency equivalent of the original transaction. It helps reconcile different currencies involved in the transaction and ensures consistency in financial reporting across entities operating in different countries within Europe.<\/p>\n<\/div>\n It’s worth noting that the specific calculation methods and exchange rates used may vary depending on the relevant accounting regulations and practices in each country.<\/p>\n<\/div>\n What is the reporting currency in this scenario?<\/p>\n<\/div>\n In the scenario mentioned, the reporting currency refers to the currency in which the financial results and statements of the entity are presented to stakeholders, such as investors, regulators, or management. It is the currency used for external reporting purposes.<\/p>\n<\/div>\n The reporting currency is typically determined based on the entity’s headquarters or the country where it is primarily operating. It is chosen to provide meaningful and consistent financial information to users who may have different currencies or reporting requirements.<\/p>\n<\/div>\n In the context of the triangular amount calculation, the reporting currency is not directly involved. The focus is primarily on the functional currency, transaction currency, and the triangular currency. The reporting currency would come into play when presenting the financial statements and results to stakeholders.<\/p>\n<\/div>\n For example, let’s consider a multinational company with headquarters in the United Kingdom (UK) and operations in multiple countries across Europe. The functional currency for the UK headquarters would be the British Pound (GBP), while subsidiaries in other European countries might have their respective functional currencies (e.g., Euro for a subsidiary in Germany). In a transaction between the UK headquarters and a subsidiary in Germany, the transaction currency might be Euro, and the triangular currency used for conversion purposes could still be Euro. However, when presenting consolidated financial statements to stakeholders, the reporting currency would typically be the British Pound (GBP) since it reflects the entity’s headquarters and is the currency used for external reporting.<\/p>\n<\/div>\n It’s important to note that the reporting currency can vary based on an entity’s circumstances, such as its jurisdiction, listing requirements, or the preferences of management and stakeholders.<\/p>\n<\/div>\n<\/div>\n Which currency is used to record book? Local currency, transaction currency, functional curremcy, reporting currency, triangular currency?<\/p>\n<\/div>\n Explain with the following scenario. An entity is in England reporting their annual report in GBP.<\/p>\n<\/div>\n The purchase by the subsidialy in Swiss the transaction based on Schweizer Franken from France Factory. How they book journal entry?<\/p>\n<\/div>\n In the scenario you described, where an entity is based in England and reports their annual report in GBP (British Pound), let’s consider the purchase made by their subsidiary in Switzerland, with the transaction denominated in Swiss Francs (CHF) from a factory in France.<\/p>\n<\/div>\n In this case, the different currencies relevant to recording the book entry would be:<\/p>\n<\/div>\n Transaction Currency: The transaction currency is Swiss Francs (CHF) since the purchase was made by the subsidiary in Switzerland.<\/p>\n<\/li>\n Functional Currency: The functional currency of the subsidiary in Switzerland would typically be the Swiss Franc (CHF). It represents the primary currency used for their financial reporting and operations. Therefore, the subsidiary’s books would record the transaction in their functional currency (CHF).<\/p>\n<\/li>\n Reporting Currency: The reporting currency of the entity based in England is GBP (British Pound) since their annual report is prepared and presented in GBP. The subsidiary’s transaction would need to be translated into GBP for consolidation purposes when preparing the consolidated financial statements.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n Now, let’s consider how the journal entry would be booked for this scenario:<\/p>\n<\/div>\n When the subsidiary in Switzerland makes the purchase in Swiss Francs (CHF) from the factory in France, the journal entry would typically be recorded in the subsidiary’s functional currency (CHF). The specific accounts debited and credited would depend on the nature of the purchase (e.g., inventory, accounts payable).<\/p>\n<\/div>\n For example, the journal entry might look as follows:<\/p>\n<\/div>\n Debit: Inventory (CHF) This initial journal entry would reflect the purchase transaction in the subsidiary’s functional currency (CHF).<\/p>\n<\/div>\n Later, during the consolidation process, when preparing the consolidated financial statements, the subsidiary’s books would need to be translated into the reporting currency (GBP). This translation would involve converting the subsidiary’s functional currency amounts (CHF) to GBP using the appropriate exchange rate. The resulting amounts would then be included in the consolidated financial statements in GBP.<\/p>\n<\/div>\n It’s important to note that the triangular currency concept mentioned earlier would not be directly applicable in this scenario, as it typically relates to transactions involving three currencies, whereas this purchase involves only two currencies (CHF and GBP).<\/p>\n<\/div>\n What if the purchase transaction from France is in EUR?<\/p>\n<\/div>\n If the purchase transaction from France is denominated in Euros (EUR), the accounting treatment would be slightly different. Let’s consider the scenario where the subsidiary in Switzerland makes a purchase in Euros from a factory in France.<\/p>\n<\/div>\n In this case, the relevant currencies for recording the book entry would be:<\/p>\n<\/div>\n Transaction Currency: The transaction currency is Euros (EUR) since the purchase is made in Euros from the factory in France.<\/p>\n<\/li>\n Functional Currency: The functional currency of the subsidiary in Switzerland is typically the Swiss Franc (CHF). The subsidiary’s books would record the transaction in their functional currency (CHF). However, the subsidiary may need to keep records or have an internal reporting in Euros for transactional purposes.<\/p>\n<\/li>\n Reporting Currency: The reporting currency of the entity based in England is GBP (British Pound) since their annual report is prepared and presented in GBP. The subsidiary’s transaction would need to be translated into GBP for consolidation purposes when preparing the consolidated financial statements.<\/p>\n<\/li>\n<\/ol>\n<\/div>\n Now, let’s consider how the journal entry would be booked for this revised scenario:<\/p>\n<\/div>\n When the subsidiary in Switzerland makes the purchase in Euros (EUR) from the factory in France, the journal entry would typically be recorded in the subsidiary’s functional currency (CHF). The specific accounts debited and credited would depend on the nature of the purchase.<\/p>\n<\/div>\n For example, the journal entry might look as follows:<\/p>\n<\/div>\n Debit: Inventory (CHF) The initial journal entry would reflect the purchase transaction in the subsidiary’s functional currency (CHF), even if the transaction was conducted in Euros (EUR).<\/p>\n<\/div>\n During the consolidation process, when preparing the consolidated financial statements, the subsidiary’s books in CHF would need to be translated into the reporting currency (GBP). Additionally, the subsidiary’s EUR amounts would also need to be converted into GBP.<\/p>\n<\/div>\n To achieve this, the subsidiary’s Euro-denominated transaction would first be converted into the functional currency (CHF) using the applicable exchange rate. Then, the CHF amount would be translated into GBP using the appropriate exchange rate.<\/p>\n<\/div>\n The resulting amounts in GBP would be included in the consolidated financial statements.<\/p>\n<\/div>\n It’s important to note that the triangular currency concept would not be directly applicable in this scenario since there are only two currencies involved (EUR and GBP). The functional currency (CHF) is the primary currency for the subsidiary’s financial reporting, while the reporting currency (GBP) is used for the consolidated financial statements.<\/p>\n<\/div>\n Do we need to book amount in transaction currency for journal entry? In accounting, the decision to book amounts in the transaction currency or functional currency for journal entries depends on the specific circumstances and accounting principles followed by an organization. Here’s an explanation of when the functional currency might be used in journal entries:<\/p>\n<\/div>\n Transaction Currency: The transaction currency represents the currency in which a specific transaction is denominated or conducted. It is the currency mentioned in the transaction document, such as an invoice or purchase order. In some cases, journal entries may be recorded directly in the transaction currency, especially when there are specific reporting or regulatory requirements to do so.<\/p>\n<\/div>\n Functional Currency: The functional currency is the primary currency used by an entity for its financial reporting and operations. It is determined based on various factors, including the country of operation, economic environment, and management’s judgment. Journal entries are typically recorded in the functional currency to ensure consistency in financial reporting and internal controls.<\/p>\n<\/div>\n In the example you mentioned with the subsidiary, the journal entry was recorded in the functional currency (e.g., Swiss Francs) rather than the transaction currency (e.g., Euros). This is a common practice, especially when the functional currency is different from the transaction currency. By recording transactions in the functional currency, it allows for better integration with the overall financial reporting and internal control systems of the subsidiary.<\/p>\n<\/div>\n The decision to post amounts in the functional currency in a journal entry can be influenced by factors such as:<\/p>\n<\/div>\n Regulatory requirements: Local accounting regulations or tax laws may specify the currency in which certain transactions should be recorded or reported. The first reccomendation in 2007 designed by Nobu. Subsequent updates. The followiing example file is downloadable from above “XBRL Global Ledger Taxonomy Framework 2015<\/a>“<\/p>\n<\/div>\n1. Mapping between ADC, ADS and XBRL-GL<\/h2>\n
1.1. Mapping table<\/h3>\n
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\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n <\/td>\n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n \n 1.2. What is the European Triangular currency?<\/h3>\n
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1.3. Bookkeepping in the subsidiary<\/h3>\n
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\nCredit: Accounts Payable (CHF)<\/p>\n<\/div>\n\n
\nCredit: Accounts Payable (CHF)<\/p>\n<\/div>\n
\nAvove example in a subsidiary books transaction in functional currency not transaction currency.
\nWhen do we need posting functional currency in journal entry?<\/p>\n<\/div>\n
\nConsolidation purposes: When preparing consolidated financial statements, transactions of subsidiaries with different functional currencies may need to be translated into the reporting currency (e.g., the currency of the parent company).
\nManagement reporting: If an entity’s internal reporting and analysis are performed in the functional currency, it may be beneficial to record journal entries in that currency for consistency and ease of analysis.
\nIt’s important to consult the applicable accounting standards, regulatory requirements, and internal policies of your organization to determine the specific currency in which journal entries should be recorded. Additionally, working with a qualified accountant or financial professional can provide further guidance tailored to your specific situation.<\/p>\n<\/div>\n<\/div>\n<\/div>\n<\/div>\n2. Example instance document<\/h2>\n
\nXBRL Global Ledger Framework (RECOMMENDATION)<\/a><\/p>\n<\/div>\n
\nXBRL Global Ledger Taxonomy Framework 2015<\/a><\/p>\n<\/div>\n2.1. Sample Journal entries file for XBRL Global Ledger Framework with annotations Version 1.0.91021.1<\/h3>\n