Many companies have foreign subsidiaries where GAAP requires the functional currency to be the US Dollar, but where there continue to be local currency requirements. This requires the implementation of NetSuite Multi-book to translate the subsidiary’s transactions into the local currency for local reporting purposes.
NetSuite Multi-book treats each transaction as individual for the purposes of foreign currency reporting. In other words, if there is a transaction in local currency, that transaction is brought over directly to a secondary book in that currency, as opposed to being posted to USD in the primary book then translated to the local currency. It also means that any currency transactions that are in either USD or the local currency are translated independently for the primary and secondary books. In other words, in the case of a company located in the UK, the following transactions would appear as follows:
USD 1000 Transaction
Primary book USD 1000, Secondary book GBP 728 Rate 1.37363
GBP 500 Transaction
Primary book USD 686.82 Secondary book GBP 500 Rate 1.37363
EUR 800 Transaction
Primary book USD 952.33 Rate 1.18267 Secondary book GBP 695.04 Rate 1.151
Note that if the USD amount translated over to the GBP secondary book, transaction 2 would still be GBP 497.09 and transaction 3 would be GBP 693.29. However, that is not how Multi-book treats these transactions.
NetSuite Multi-book attempts to treat the primary book and secondary book as two completely separate transaction streams. This is important to understand for the purposes of analysis and reporting.
For more information on this topic or others related to NetSuite, contact RSM at email@example.com or by phone at 855.437.7202.