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Preventing and Correcting Unexpected FX Revaluation in Ledger Settlement

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Posted on by ST-13020852-0

Issue :

In our USD company, we posted a GBP debit transaction in June 2023.
We later cleared it in USD in September 2023 using Ledger Settlement.
When we ran the 31/12/2023 FX revaluation, no adjustment was posted, as expected.
However, after running the Opening Transactions function in 2024, the GBP amount was brought forward, even though its USD equivalent had already been cleared.
When we ran the FX revaluation on 01/02/2024, the system unexpectedly recalculated the USD equivalent of GBP and posted an FX adjustment.

Our Questions:

📌 How can we prevent this issue in the future so that no unnecessary FX adjustments are posted after the opening transactions?
📌 What is the correct corrective action in 2024 to fully clear the transaction and ensure accurate financial reporting?

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Microsoft Dynamics AX

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ST-13020852-0 44 on at

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Here is a screenshot of the postings done.

as you can see the first two postings were settled between them in 2023

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BillurSamdancioglu 19,854 Most Valuable Professional on at

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You can dısable the feature of FX calculatıon on settlement but ın thıs case non wıll be calculated.

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ST-13020852-0 44 on at

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-Why did the system bring forward the transactions even though they were settled before year-end?
-Is this standard behavior for the Opening Transactions function, and how does it determine which balances to carry forward?
-What is the best way to prevent this from happening in the future to ensure no incorrect FX adjustments are posted?

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ST-13020852-0

44 on at

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Hello everyone,

I’m facing an issue with ledger settlement and the handling of opening transactions in a multi-currency environment, and I’d appreciate any insights on whether the suggested approach is correct.

Scenario:

My company’s accounting currency is USD.
I posted a General Journal in SGD on 01/06/2024:
- Dr Prepayment (Balance Sheet Account)
- Cr Bank
Later, I cleared the entry on 01/09/2024:
- Dr Expense Account (Profit & Loss)
- Cr Prepayment (Balance Sheet)
I then used Ledger Settlement to match these transactions.
After this, my Trial Balance for 2024 correctly shows a 0 balance.
When I ran the Opening Transactions functionality for 2025, the system brought forward both transactions as follows:

Date	Year Closed	Type	Currency	Amount in Transaction Currency	Accounting Amount	Amount in Reporting Currency
01/01/2025	No	Opening	USD	-531	-531	0
01/01/2025	No	Opening	SGD	752.15	531	0

Suggested Fix:

It was recommended that I:

Use Ledger Settlement during the year to match transactions.
At year-end, create a manual journal entry to reverse and repost with a manually adjusted exchange rate to avoid issues with opening balances.

Question:

Is this the correct approach?
Would there be a better way to handle this scenario to ensure that opening balances don’t bring forward unmatched FX differences?
How do you typically handle this type of multi-currency opening transaction issue

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Suggested answer

Abhilash Warrier 5,426 Super User 2025 Season 2 on at

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Hi,
You can try the below approach as well –

Settle Transactions Before Year-End:

Best Practice: Always settle related transactions in Ledger Settlement before closing the fiscal year. This ensures that any FX gain/loss is recognized in the correct period and does not roll forward unexpectedly.

Steps: Go to General Ledger > Periodic Tasks > Ledger Settlements. Match the prepayment and expense transactions completely before year-end. Ensure that all FX revaluations are posted before closing

Run Foreign Currency Revaluation:

Addressing FX Differences: Before year-end closing, run Foreign Currency Revaluation to adjust for any FX differences properly.

Steps: Navigate to General Ledger > Periodic > Foreign Currency Revaluation. This will help ensure that any FX differences are accounted for correctly.

Manual Journal Entry:

Suggested Fix: Create a manual journal entry at year-end to reverse and repost transactions with a manually adjusted exchange rate. This can help avoid issues with opening balances.

Enable Advanced Awareness Options:

In Dynamics 365 Finance, enable the advanced awareness options for ledger settlement and year-end close. This feature helps manage FX differences and ensures accurate opening balances.

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Preventing and Correcting Unexpected FX Revaluation in Ledger Settlement

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