Understanding Additional Reporting Currency in Microsoft Dynamics 365 Business Central 

Introduction

The Additional Reporting Currency feature in Business Central allows a company to maintain its financial records in a secondary currency, in addition to the primary currency. This secondary currency is used for reporting and analytical purposes, providing a clearer picture of the company’s financial health in the context of different economic environments. The use of Additional Reporting Currency for Regulatory Compliance, Simplified Financial Reporting, Enhanced Decision Making. 

Steps to achieve the goal: 

1. Defining the Additional Reporting Currency 

Navigate to the “General Ledger Setup” page and specify the additional reporting currency. This can be any currency other than the primary currency of your company’s base country/region. 

Here I am going to set SGD as my Additional Reporting currency. Before I set SGD in my Additional Reporting currency, I have to make sure I am assigning the exchange rates properly. 

2. Specifying Exchange Rates 

Define the exchange rates between the primary currency and the additional reporting currency. This can be done through the “Currency Exchange Rates” page. It is crucial to regularly update these rates to reflect current market conditions. 

3. Specify the residual gain and loss account in your Currency 

The field is ideally not visible in screen. You can personalize and make those fields visible on your screen. Click on Settings icon-> Personalize->Field->Select the field and drag the field in your screen. 

Set the GL account to update its additional Currency value for future transactions.

Globally search Chart of Accounts and Open the G/L Account that you wished to update its Additional currency value whenever you Adjust the transactions.

No Adjustment: The default selection. No adjustments are made to the account

Adjust Amount: Any gain or loss in exchange rates is reflected in the LCY amount field.

Adjust Additional-Currency Amount: Any gains or losses in exchange rates are taken into account when adjusting the additional currency amount field.

Please Note: You cannot set VAT Purchase or Vat Sales Account and G/L Accounts which you have tagged in Currency page (Realized gain and loss, Unrealized gain and loss, residual gain and loss) as for Additional reporting currency. As it can throw error when you perform Revaluation in the system.

4. Final Setup 

Go to general ledger setup and set the Additional Reporting currency SGD and set Retained Earnings Account, Set Document not as per the screenshot below and click on OK.  This is batch job used to convert LCY transactions to Additional Currency. The exchange rate that is in effect on the work date is used in the job.
The entry that is posted to the retained earnings account should be indicated in the Document No. field. On the last day of every closed year, this rounding entry is made to ensure that all income and expense accounts have a zero balance.
The same account used when running the Close Income Statement batch job.

You would view the below message once the transaction is calculated in the system. Click on OK. You can change the Additional Reporting currency again in future once it is set. Please note any Analysis created for previous Additional Currency that you must delete.

Before and After setting up this configuration 

– Before the Additional Currency Setup  

The Chart of Accounts Additional Currency Net change and Additional Currency Balance to Date is blank no values. 

– After the Additional Currency Setup  

The Chart of Accounts Additional Currency Net change and balance to date value has been set. 

Please Note: Warning Issued by Microsoft on Additional reporting Currency 

Conclusion 

The Additional Reporting Currency feature in Microsoft Dynamics 365 Business Central offers a robust solution for maintaining financial transparency and compliance. By setting up and leveraging this functionality, businesses can streamline their financial reporting processes, enhance decision-making, and ultimately achieve greater financial clarity and control. 

Whether you are a small business expanding into new markets or a large enterprise with operations in multiple countries, the Additional Reporting Currency feature in Business Central can provide the tools you need to succeed in a complex financial landscape. 

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