Introducing Multi-currency Functionality
Gone are the days when the principal reporting requirement for a project cost control system was to display all report values in U.S. dollars (USD), the common currency of control for major projects worldwide. In recent years, currency fluctuations, increased use of local contractors, and local content reporting requirements have led to a growing need to display different currency values within the same report.
Kildrummy® CostMANAGER (KCM) has always allowed the use of multiple currencies and conversion to other currencies using different exchange rate mechanisms. Enhancements in KCM Version 2.8 not only enable report data to be grouped by currency, but also allow different currencies to be selected on a per-column basis within the same report. This is true multi-currency reporting! It is also now possible to capture and report budget item values held in different currencies for any project in the KCM database.
The report below shows the budget item allocation lines for contract CO1 with the value fields configured to create a FOREX variance report. It illustrates two key features:
1. Document allocations can now be grouped by their natural currency. For reference Column E shows this currency on each line. Contract CO1 has been allocated in four currencies.
2. Report columns can now be displayed in different currencies within the same report. Column A (shaded yellow) shows each allocation value for Original Contract in natural currency. Columns B, C, and D show this value converted to US dollars. Column B is converted to US dollars using the Rate of the Day exchange rate, while Column C is using the fixed Project rate. Column D is the difference between these values – the FOREX gain / loss.
Note that report column levels will only be totaled where appropriate. In Column A the Total field is blank since it is not appropriate to add different currencies together.
To produce the example report, follow the steps below.
Tabular Report Template
- A Tabular Report Template is created with a view to reporting Contract Document values. Firstly, the columns Code, Description and Currency Code are added. Then four columns based on our chosen Document value column Original Contract are also added; three will be defined as described below and one is a place holder for a variance calculation function.
Consideration is now given to the currency conversion criteria on each Original Contract value column in turn.
- For Column A, the value is to be displayed in the ‘Natural’ currency of allocation, therefore no currency conversion is required.
- In the toolbar drop-down box for the Currency Conversion mechanism a new option of ‘None’ has been added.
- Select the ‘None’ option for the first value column.
- Having selected ‘None’ for the conversion mechanism, the target currency setting for this column can be ignored.
- The column header is edited to give the required report header text:
- The Original Contract value in column B is to be consolidated to USD which is the currency of control. The target currency is therefore selected as ‘Report’. The currency conversion mechanism for this column will be the Document Rate / Rate of the Day.
- Once the column has been defined the appropriate header can be added.
- The Original Contract value in column C will also be consolidated to USD, the Exchange rate mechanism used is the the Project Rate (fixed rate set at project start).
- A function must be created as per normal in KCM for the FOREX variance which will subtract the Column C value from the Column B value. This function is selected for Column D on the tabular report template. The Target Currency will again be set to ‘Report’.
Report Criteria Screen
- In the run tabular report screen, select the template that has just been created. The important consideration is the selection of levels in the structure window. Documents and Allocations should be selected as per a standard KCM Document Report. Also select Allocation currencies since a currency grouping is required.
- Remember to select the appropriate document type – Contracts – as per a normal document report, and include any filters as required. In this example the required Report Currency is set to USD. The report is now ready to run and the output should be as shown in the first figure in this post.
- Users are recommended to also run this report with the Allocations level unchecked for an alternative report with the allocation values rolled up to the currency level itself.
In Part 2 we will look at how to set up and report on budget values held in different currencies.