Amount in group currency = Amount in local currency × Exchange rate (average for P&L, closing for balance sheet)
The consolidation exchange rate is the rate used to translate each entity's financial statements, in its functional currency, into the group's currency. It is usually the period's average rate for the P&L and the closing rate for the balance sheet.
How it is calculated
Amount in group currency = Amount in local currency × Exchange rate. P&L: average rate for the month (or year to date). Balance sheet: closing rate on the last day. Equity stays at historical rates, and the remaining gap is booked as a translation difference.
Example with numbers
The Mexican subsidiary closes the month with revenue of 2,000,000 MXN and receivables of 900,000 MXN. Average rate: 0.050 EUR/MXN; closing rate: 0.048. Consolidated revenue: 100,000 EUR. Consolidated receivables: 43,200 EUR. If last month's closing rate was 0.052, receivables lost 3,600 EUR on exchange rate alone.
How Fibady does it
Each entity has its exchange rate configured per entity and per period, with whatever policy the group decides (average, closing or custom). The consolidation is shown in dual currency, local and group, and every translated figure opens down to the original amount in local currency.