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How to Implement Constant Currency (FX Impact) in Oracle Hyperion Planning
Posted on January 18, 2017
Author: Vahram Gabrielyan, Performance Architects

As a financial analyst for a multinational company, it was my job to come up with variance explanations for our monthly, quarterly and annual financial reports. At the end of 2015, the strong U.S. dollar started causing major fluctuations in our financials. Foreign exchange (FX) fluctuations became a constant talking point in our monthly business reviews.

Even though we had all of our data loaded in Oracle Hyperion Planning, I found myself using multiple Excel tabs to manually calculate the FX rate fluctuations in our financials. During a month-end close, I found myself ruminating over my manual calculations. Two thoughts came to mind: 1) “Dang, boy, that looks good.” and 2) “There has to be a better way to do this.”

Fast forward to my current position as a consultant at Performance Architects working on Oracle EPM (Hyperion) implementations. At my current client, we were tasked with creating a Hyperion Planning module which would calculate constant currency (CC) or FX impact. All of the Excel tabs that I used to come up with a single currency fluctuation would now be substituted by a business rule that would retrieve that one number with one click. Here are some key points when looking to create your own CC capabilities.

First, decide what kind of conversion your company needs. Choose between the following options:

  • Convert current actuals using previous year actual rates
  • Convert previous year actuals using current year act rates

Both of the options are valid; choosing one simply depends on your organization’s needs. My client decided to use previous year rates to convert the latest data.

Next, decide on CC scenarios. Some CC scenario examples include, but are not limited to, these options:

  • Current forecast at budget rate
  • 2015 actuals at 2014 actual rates
  • Current forecast at previous forecast rates

Based on your reporting needs, the number of CC scenarios may vary. We created eight scenarios at my current client. Keep in mind, a larger number of scenarios will give you reporting flexibility, but it may increase the maintenance time.

Lastly, I recommend creating a separate set of substitution variables (system variables) for CC calculations.  Most often, CC calculations would occur after the books are closed and substitution variables are updated. However, you may still need the previous month/year data for your calculations.

To conclude, FX fluctuations have become more common in financial variances, and analysts spend more time manually calculating them. It may be a good idea to talk to your Oracle Hyperion Planning team or partner to build a CC capability in your Oracle Hyperion Planning or Oracle Essbase environment.

Need help figuring out FX impacts in your planning environment? Contact us at sales@performancearchitects.com and we can help you out!

 

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