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author's profile photo Former Member
Former Member

Reverse Revaluation Process after month end

Hi All,

I want to ask is it a common practice to reverse the revaluation postings done by FAGL_FC_VAL after the month end process? If so, that means the revaluation process is just giving us a better estimate of the outstanding AR and AP amount in the balance sheet to make it more accurate. Is this correct?

Thanks.

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  • author's profile photo Former Member
    Former Member
    Posted on Aug 11, 2009 at 10:53 AM

    Hi. Yes.

    You have to revaluate at the period end to get an accurate FI statments...

    But you have an opportunity that it wouldn't reverse(delta posting). There is a note for it

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  • author's profile photo Former Member
    Former Member
    Posted on Aug 11, 2009 at 11:11 AM

    Hi,

    Foreign Currency Valuation is needed for all open items (G/L, A/R and A/P) as per different Accounting Standards so that Balance Sheet of the entity displays correct Profit or Loss for the period.

    However since the items are still open its advisable to reverse the valuation on the 1st day of the next period. That's why in FAGL_FC_VAL, system would posts to Unrealized Exch Gain /Loss Account.

    There is an exception though to the Account with balance in Foreign Currency like Main Bank Account. In this case the difference in Foreign Currency needs to be posted to Exch Gain / Loss Realized Account.

    Once the item gets cleared automatically system posts to Exch Gain / Loss Realized Account.

    Regards,

    Sanjay

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