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Former Member

Reversal of unrealized Gain/Loss

Dear All experts,

Our company just subscribed to SAP about a month ago.

And we learned from our consultant that we are advised to do reversal for BP when we do reval of foreign exchange.

My question is, because this is not our practise before SAP, so Im not too sure about this, If I were to do this reversal on the first day of following month, should I do it on JUST the BP? what about the rests asset(bank a/c) and liability(loan etc) account? Should I reverse them too?

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2 Answers

  • May 23, 2015 at 03:20 AM

    Hi

    The reversal of FX Un realized gain/Loss depends on the accounting principles in your country. Generally, in most markets, it is a accounting principle to convert all your open FX Transactions/balances to local currency for balance sheet purpose, which is supposed to be in local currency and than reverse the same on the first day of the next period. This is done so that you can book actual FX Gain/loss as and when it happens. So it depends on how you want to account such transaction. I believe, the issue is more of a Business process rather than what you want to do in SAP.

    Thanks & Regards

    Sanil Bhandari

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    • Hi

      If your accounting principle suggests to revaluate all foreign currency items, than you can valuate:

      1. Your open items for AR & AP in foreign currency

      2. Your foreign currency bank balances

      3. You foreign currency loans taken and granted

      4. Your foreign currency GR/IR Open Items

      It depends on your specific business process rather than how SAP dictates.

      Regards


      Sanil Bhandari

  • May 24, 2015 at 07:08 AM

    Hi ,

    Reversal and non reversal, depends on specific business requirement. Please check the below thread , which explains the same.

    Regards

    Rudra

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