The Currency Revaluation process allows you to revaluate General Ledger and Internal Ledger accounts (in practice balance sheet accounts) due to currency rate fluctuations. Changes in the value of a currency, in relationship to other major currencies results in currency rate fluctuation. Currency fluctuations can have a significant effect on the business process as a whole. Therefore the currency revaluation process helps you to calculate and identify these differences. This difference (Unrealized Currency Gains/ Unrealized Currency Losses) is then automatically posted to the General Ledger or Internal Ledger for the current period and reversed in the following period.
The Currency Revaluation process allows you to revaluate amounts in General Ledger or Internal Ledger accounts (in practice balance sheet accounts) due to currency rate fluctuations. For example, a transaction performed in foreign currency one year ago may have a different equivalent amount in local currency now due to currency rate changes. This change in the amount in local currency should be accounted for in each period in order to reflect the correct amounts. Therefore, the currency revaluation process is used to calculate and identify these differences. This difference will be calculated per period and will be reversed in the immediate next period as an unrealized gain/loss.
Currency revaluation can only be performed on accounts of type Assets and Liabilities for Accounting Currency. For Parallel Currency it is possible to revaluate accounts of type Revenues and cost as well. All accounts for which currency revaluation should be performed should be specified in basic data requirements. For accounts belonging to Accounts Receivable/Accounts Payable, currency revaluation can be performed based on each transaction or the overall balance as at the end of a period. For general ledger and Internal ledger accounts, revaluation will always be performed based on the balance of the account. You can also specify the method of accounting to use when currency revaluations exist.
If you want to execute a currency revaluation, you need to update all the vouchers in the hold table for the relevant period to the general ledger. Currency revaluation can then be performed for each period. A currency revaluation could result in an unrealized currency gain or loss. An unrealized currency gain uses the posting control GP10 and an unrealized currency loss uses the posting control GP11.
Follow up information on currency revaluations performed can be viewed based on each account as well as each transaction if the revaluation is performed on the transaction level.
Before you start entering information, Set up the Basic Data Required (BDR) .