System
Abacus Enterprise Workflow
Personal Tax
PRT
Authorised Investment Fund
Corporation Tax
Group Module
Investment Trust
Life
Hotline
Pack development
P11D
Partnership Tax
Partnership Gains
Tracker
Administrator
Irish Corporation Tax
Abacus+
Hong Kong Profits Tax
Abacus Enterprise Workflow
Abacus+ v2
PCS Client Manager
VAT
System Lite
Corporation Tax Lite
Working with Foreign Currencies |
See Also
The software will permit computations to be prepared containing multiple currencies, or indeed, entirely in a foreign currency. The facilities available to aid preparation are outlined below; for simplicity it is assumed that the foreign currency is U.S. $ in all examples quoted.
All currency menu options are accessed by using the Currencies bar described under the toolbar (this is equivalent to using the Currency options under the Format menu). These bars may be enabled by right-clicking in either the menu or status bars and moved around the screen as appropriate.
Setting the currency for a file
Before work on foreign currency is commenced, the user must specify a global currency (usually the predominant currency of the computation). This turns currency checking on within the system and would normally be UK . If it is not, the user must enter into the system an appropriate exchange rate for translation of upper and lower limits for the tax calculations, and for example, expensive car capital allowance calculations.
Use the Currencies bar to set the level to which the foreign currency should be set to File and select the relevant currency from the drop-down listing. This is the same as invoking Currency, Format, Select currency and then File from the menu bar.
Wherever possible you should use the currencies bar to set the default exchange rate for the whole computation, as this may be simply set without recourse to the following steps detailed below. The currencies bar allows you to add a new exchange rate and automatically formats the entry to equate to that described in point 2 below, and it will also set the exchange rate to the specified number of decimal places.
If you choose to use the Format menu to set the exchange rate, then
you need to follow the steps below:
1. Choose a cell to enter the exchange rate into. You may wish to show this at the bottom of an appropriate schedule, alternatively, it may be shown on a working paper ( 'R' is suggested).
2. Type the exchange rate into the cell using the notation [local currency symbol] @ [currency symbol] [exchange rate] (e.g. £@$1.5 to convert at the rate of $1.5 to a ).
3. Set the number of decimal places for the cell containing the exchange rate (Format, Cells, Numbers).
4. Use Format, Currency, Exchange Rate, File.
When asked for the range to be used as the exchange rate, use the arrow keys
and the <F5> key to go to the cell containing the required exchange rate.
The system will now automatically convert from $ to and vice versa using the exchange rate supplied whenever it detects that conversion is required.
Again we recommend you use the Currencies bar to set the level to Sheet to which the foreign currency should be applied and then select the relevant currency from the drop-down listing. This only needs to be done where the required currency for the schedule differs from that specified for the File, as described above.
This is the same as invoking Format, Currency, Select currency and then Sheet from the menu bar.
Where it is necessary for an entire schedule to have a particular exchange rate which differs from that set for the file as a whole, again you should use the currencies bar to set the default exchange rate for that schedule or Sheet as it is listed in the drop-down menu.
Alternatively you can manually enter the exchange rate to be applied to the
schedule following the steps below:
1. Choose a cell to enter the exchange rate into. You may wish to show this at the bottom of the appropriate schedule. Alternatively, it may be shown on a different schedule or on a working paper such as 'R'.
2. Type the exchange rate into the cell using the notation [local currency symbol] @ [currency symbol] [exchange rate] (e.g. £@$1.5 to convert at the rate of $1.5 to a ).
3. Set the number of decimal places for the cell containing the exchange rate (Format, Cells, Numbers).
4. Use Format, Currency, Exchange rate, Sheet. When asked for the range to be used as the exchange rate, use the arrow keys and the <F5> key to go to the cell containing the required exchange rate.
It is possible to set the currency for a particular range of cells on a schedule. Highlight the cell range to which the currency is to be applied then use the Currencies bar to set the level to Cell and then select the relevant currency from the drop-down listing.
This is equivalent to using Currency from the Format menu, Select currency, and Cells.
You should use the currencies bar to set the default exchange rate for the cell range highlighted on the schedule.
Alternatively you can manually enter the exchange rate to be applied to the schedule following the steps below:
1. Choose a cell to enter the exchange rate into. You may wish to show this at the bottom of the appropriate schedule alternatively, it may be shown on a different schedule or on a working paper such as 'R'.
2. Type the exchange rate into the cell using the notation [local currency symbol] @ [currency symbol] [exchange rate] (e.g. £@$1.5 to convert at the rate of $1.5 to a ).
3. Set the number of decimal places for the cell containing the exchange rate using the Format, Cells, Numbers menu bar option.
4. Use Format, Currency, Exchange rate, Cells and highlight the range to which the exchange rate is to be applied; use the <F6> key or the <F5> key to go to the cell containing the required exchange rate.
If part of a schedule is in one currency with the remainder of the schedule in a second currency, this option allows the transition from the first to the second currency to be displayed as a subtotal which shows the conversion between currencies. The procedure is as follows:
1. Assuming that a UK schedule starts with a range of U.S. $ cells, create a subtotal for this range. The cell containing the subtotal should be formatted in UK per the Setting the currency for a range section above,and the appropriate exchange rate should be specified for this cell described in the section, Setting the exchange rate for a cell or range .
2. Choose Currency from the Format menu, then Convert total. When requested to specify the range to format, highlight the cell which contains the subtotal. This will display the conversion calculation on the schedule, with the total presented in U.S. $, double-underlined, and in sterling underneath.
Note that only one foreign currency can be summed in a single footing. This option can also be used where a schedule in one currency is cross-referenced to a schedule which is formatted in a second currency; in this case, the procedure can be applied to the total at the end of the first schedule.
It is possible to do normal arithmetic with foreign currencies and exchange rates within the system instead of using the Currency options. This technique is only relevant for use on blank computation schedules and working papers.
The user may have a list of figures entered as $ amounts and a corresponding column of exchange rates. To translate each $ amount at the corresponding exchange rate the user must divide the $ amount's cell reference by the cell reference of the exchange rate, e.g. +B10/C10.
Note that the exchange rate column must contain entries in exchange rate format, e.g. @$2.
This procedure could be used to calculate a weighted average exchange rate for, e.g. a group of additions in a foreign currency qualifying for capital allowances. When the sterling amount of each item has been calculated, the weighted average would be calculated by dividing the total of the $ column by the total of the columns.
Note that the accuracy of the cell containing the weighted average rate must be set to sufficient decimal places. See the Cells schedule for further details.