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Former Member

Foreign Currency - Revaluation / Translation

Hi:

I wanted to discuss and understand the best practice for foreign currency revaluation and translation routine.

This is how we do and configured the revaluation / translation routine:

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Valuation Area:

SG for revaluation - Currency Type 10 (Local)

S2 for translation - Currency Type 30 (Group)

Valuation Method: EVR (Always Valuate)

In the ledger currencies for 30, "Translation taking transaction currency as a basis".

Plus other coniguration for account determination (both revaluation and translation). - OBA1 and "Define Account detemination for currency translation".

Based on this configuration, we run following transactions at month end:

Revaluation: FAGL_FC_VAL using S2

Translation: FAGL_FC_TRANS using SG

So what it does is, it revalue document currency into local currency and then translate document currency into group currency.

Ideally, what should be as per GAAP is: Revalue document currency into local currency and then translate local currency into group currency.

In our configuration, we are not able to translate out of local books. The configuration translates from document currency to group currency.

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Are we missing anything in the configuration or this is standard? What is the best practice or how other companies are running the revaluation/translation routine?

Scenario is:

Document Currency: AUD

Local Currency: GBP

Group Currency: USD

Please advise.

Thanks.

Rahul

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3 Answers

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    Former Member
    Oct 12, 2010 at 05:14 PM

    Any Suggestions please?

    Thanks.

    Rahul

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    • Former Member Former Member

      Hi Venkat,

      i am valuating my vendor open item balances. My scenario is like

      Balance of Acer Limited on 10 April 2014 amount USD 1000 @ Rs 65/- = Rs 65000/-

      On Month End (30 April 2014) one usd = INR 70 in that case below entry

      Unrealized Exchange Gain Debit Rs 5000/- (USD 1000X5) (Expense A/C)

      Acer Limited Credit RS 5000 (Vendor A/C0



      Is there any chance to post such type of entries using this functionality

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    Former Member
    Jan 03, 2011 at 08:01 PM

    Hi Rahul,

    Could you please advice me if you found out a solution to revaluate in local currency without impact on group currency?

    I have the same case. If you solved this issue, please give me a hint.

    Thank you,

    Apolzan

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  • Jul 10, 2015 at 09:07 PM

    This message was moderated.

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