Diff b/w revaluation, translation and consolidatn

[karan_2891]

Hi,

I have a small query? What is the Diff b/w Revaluation, Translation & Consolidation? Are they independent /dependent in some way or the other? If someone could explain this with the help of an example or two, it would be great.

Thanks in advance.

Regards

Karan

[kommineni7]

Hi,
Revaluation:
Basically revaluation is required , when we done any foreign currency transactions. Before month end close we have to run revaluation process to track exchange rate flatuations. after running revaluation we will prepare financial statements/FSG reports. Revaluation is independent one, only require when we done business in foreign currency transactions.

Consolidation:
To preapare consolidated financial statements, we have to run consolidation process. its just mapping of chart of accounting to consolidate transactions/balances depends upon business requirment.

Link with consolidation:
Eg: parent company is india compnay i.e. I company. subsidiary company is foreign company i.e, F compnay. to consolidate F company with I compnay. we have to run Translation process in F set of books. then only all balances is convered from F currency to I currency.

So if currencies are different b/w parent and subsidary then only Translation is required in consolidation process. in this case consolidation is dependent on translation.

Translation ;
To traslate BALANCES from functional currency to other currency.

Hope this will clear your doubt.