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Former Member
Jan 25, 2009 at 04:39 PM

foreign currency valuation for USD bank clearing..

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Hi all,

i just want to confirm the below from you all experts.

my company code local currecy = MYR(malaysian ringgit)

we have one Bank USD clg account and posting all foreign currecy (USD) transactions to that bank.

lets take an example:

1) jan(1st period) we have foreign currecy(USD) transaction -> 1000 USD that time the USD rate = 3.5

so month end the total amount in bank account = 1000 usd.

we have done the foreign currecy valuation 31st jan with the month end currecy rate = 3.6

so posted the gain/loss to unrealised forex accounts on 31st jan and reversal enry posted in feb 1st.

2) feb (2nd period) we have 4 to 5 foreign currecy transactions -> lets say the amount of this trasactions = 5000 USD and the rate = 3.4

So total balance of USD bank clg account at 2nd period ending = 5000 USD + 1st period balance 1000 USD.

so when we do foreign currency valuation again in 2nd period system valauating all the item in the bank clg account.

so like this every month the transactions in bank clg account valuating with month rate. my bank clg account got the transactions since 2006. so every month the transactions in bank clg uSD since 2006 are valuating with month rate and posting the loss/gain to unrealized forex account.

like this every month the unrealized forex gain/loss account getting posted the amount in some millions.

SO my doubt is:

1) every month the system should valuate all the transactions( like the items in the usd bank since 2006) ....?

2)whether we need to do bank clg form the clg account to main bank account after we run the forex valuation. so that system only revaluate the item posted in that particular month only.

so my unrealized forex a/c will not get post with millions.

what is the correct way ..? do we need to do bank recon(transfering the bank clg amount to main bank) for foreign currecy banks as we only valuating the bank clg account every month end.

will wait for your ANS.

Thanks.