Cumulative Balance inconsistency

[Former Member]

Hello Experts,

We have a problem with the cumulative balance of a GL account. Please help me to figure out the way system calculates this.

The problem is with a GL account belonging to a Company Code in Mexico. The account is in USD. The company code currency is PESO.

The accounts' cumulative balance does not reflect the correct valuated amount in PESO at different period (month) end. Most of the month end it shows the correct amount of balance which is the exact amount converted from USD amount to PESO in the Month end forex rate. But some period end, the PESO balance does not reflect the valuated amount that should have been after the valuation. Now the valuation differences are not posted to this account but to another balance sheet adjustment account. So, please explain how the PESO value is obtained by this account?

Thank you.

[Former Member]

there could be some valuation differences based on what exchange rate the company chooses to post with.

if its done on a monthly basis, then while doing the valuation, the difference will be posted to the forex gain/loss account, this is normal.

[Former Member]

Hi,

When the original transaction is posted in a foreign currency, it derives the translated amount from the translation date. The conversion between the document currency and local currency is gotten based on the rate type configured and the rate at that given date in the currency exchange rate mainanence table. When the account gets revaluated, it's FX difference between the date of the posting and the current revaluation key date is posted to the balance sheet adjustment account configured for that given account and against the gain/loss account at the revaluation key date.

I hope this helps. Revaluation can definitely be a confusing area.

Thanks,

Jes