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author's profile photo Former Member
Former Member

Foreign Currency Valuation

Hello Experts,

Can someone tell me the difference between foreign currency valuation and revaluation.

I am not sure if both are same or not. Can someone explain me with examples, foreign currency valuation and all postings and reverse postings associated with the valuation in terms of gain/loss accounts and balance sheet adjustment accounts.

Help in this regards is highly appreciated and duly rewarded.

Regards,

Sriram

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    author's profile photo Former Member
    Former Member
    Posted on Dec 02, 2007 at 11:27 AM

    There is no difference in both. This is the revaluation or valuation of the foerign currency transactions in your customer or vendor or GL accounts to the month end or year end conversion rate.

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 03, 2007 at 06:14 AM

    To Comply the accounting standards the foreign exchange valuation is caried out on year end date.

    For ExampleMy company code currency is INR, and a Export sale was made on 1st nov 2007 in terms of USD say 1000 USD,wherin the conversion rate was Say 39.50 INR. In Sundry debtors Books of accounts says sundry debtors balance with 1000 USD and Equivalent INR will be 39500.

    on the Year end date say 31st December the sundry debtors is still exists for 1000 USD and say conversion rate will be Rs40.00.

    Hence in books of accounts my Sundry debtors should be 40000/- ( Since my reporting date is 31.12.2007). Hence I transfer Rs 500/- to Foreign Exchange revaluation Gain/Loss account as Gain and Increase my Debtors to 40000/- in INR.

    there will not be any change USD figures. And on 1st of January I reverse the entry.

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