Film Accounting Glossary
Multi-currency budgeting
What is multi-currency budgeting?
Also called multi-currency budget.
Multi-currency budgeting is building and reporting a budget in more than one currency, necessary whenever a production spends locally in a jurisdiction other than the one financing it.
The budget fixes a rate for each currency at approval, and the cost report then carries both the local actuals and the home-currency translation. Isolating exchange movement in its own line keeps it from being mistaken for a department overspending.
Example
A budget in dollars with a £2.4M UK spend reports both the sterling actuals and their dollar translation at the fixed budget rate, with the movement isolated on its own line. Otherwise a department that spent exactly its budget appears to be over.
Figures are illustrative, chosen to show the mechanics rather than to quote market rates.
Where you'll see it
Any production financed in one currency and spent in another. The cost report carries both columns.
Common mistake
Reporting only the home-currency translation. Departments then cannot tell whether they overspent locally or the exchange rate moved.
Related questions
- How do you budget a production in two currencies?
- Fix a rate for each currency at approval, then report local actuals and the home-currency translation side by side, with movement isolated in its own line.
- Which currency should department heads work in?
- The one they actually spend in. Translating their budget hides exchange movement inside their variance and makes their performance unreadable.