What is PVA and VAL? And How should I do translation per GAPP in HFM?

There are 2 standard methods of translating an account, PVA and VAL.

PVA:

  • This method retrieves the periodic value for an account and multiplies that by the exchange rate for that period to obtain the translated amount for the current period. Then the translated amount for the current period is added to the prior period’s year-to-date (YTD) translated balance in order to calculate the YTD translated amount. The PVA method is usually applied to Income, Expense, and Flow type accounts.
  • VAL:

  • This method retrieves the YTD value in an account and multiplies that by the exchange rate. The VAL method is usually applied to Asset, Liability, and Balance type accounts.
  • An example of PVA and VAL is as follows:

    PVA

     

    JAN

    FEB

    MAR

    (Divide)

    AVERAGE RATE.FRANCS

    0.5

    0.6

    0.7

     

    INCOME ACCT (EURO)

    100

    300

    600

    (YTD Amounts)

    INCOME ACCT (USD)

    200

    533

    962

    (Translated Amt
    After Consol)

    The PVA method takes the periodic value in the INCOME ACCT and divides that by the exchange rate for that period. It then adds this result to the translated value from the prior period. It does not change the exchange rate amount or look to the prior period for the exchange rate at all. In the example above the calculations are as follows:

    JAN 100 / 0.5 = 200
    FEB (300 – 100) = 200 / 0.6 = 333 + 200 (JAN) = 533
    MAR (600 – 300) = 300 / 0.7 = 429 + 533 = 962

    VAL

     

    JAN

    FEB

    MAR

    (Divide)

    AVERAGE RATE.FRANCS

    0.5

    0.6

    0.7

     

    INCOME ACCT (EURO)

    100

    300

    600

    (YTD Amounts)

    INCOME ACCT (USD)

    200

    500

    857

    (Translated Amt
    After Consol)

    Using the VAL method instead of PVA, the results would be:
    JAN 100 / 0.5 = 200
    FEB 300 / 0.6 = 500
    MAR 600 / 0.7 = 857

    Contributed by:
    Peter Fugere, Practice Director
    HFM & HE Hyperion Certified
    Ranzal & Associates
    pfugere@ranzal.com

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    One thought on “What is PVA and VAL? And How should I do translation per GAPP in HFM?

    1. Hi,
      Could you Please do a compare as to what does the ConsolidateYTD checkbox do with an example.
      Regards
      Vivek

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