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When I check the Vendor transaction after running the AP exchange adjustment as on 31/05/2020, it is observed some of the exchange voucher reversed on 01/06/2020 for one particular Vendor and below is the the related voucher and its corresponding transaction type from which exchange adjustment voucher reflecting in Vendor transaction:
Kindly explain for such transaction being reversed by exchange adjustment in AP that too in next month when exchange is run for 31/05/2020.
Hi Chandra,
I totally agree with Ludwig explanation and caution to be considered. As for the standard behavior for Ax regarding the foreign currency revaluation transactions, please consider the following:
1- At the time for running foreign currency revaluation on date May 31st the invoice was with status open.
2- There was a foreign currency loss on May 31st.
hence, with the fact of accounting principles each fiscal period should declare separate revenues and losses, avoid duplicated vouchers. At the time or running the foreign currency revaluation, AX had to post the transaction on May 31st to make sure May 31st foreign currency amounts are correct and the other hand to avoid amounts duplication the reverse should be posted in June to make sure the settlement amount foreign currency gain/loss main account will only declare the net.
Regards,
Momen
Dear Momen,
Just to confirm and conclude this is the standard behavior of the AX application as stated above on our case.
Dear Ludwig,
Thank you for your reply.
Yes, we will consider the stated process from you end.
Just to confirm and conclude, it is the standard behavior of the AX application as stated above in our case.
Hi Chandra,
Do you really backdate transactions as illustrated in the example provided by Momen?
I think this is something you should avoid by implementing a stringent Month end closing schedule.
Applied to the example shared above, You should ensure that payment journals for June can be posted only after all transactions for May are completed and that the period May is put on hold before transactions for June can be recorded.
Do you have such a month-end checklist in place? If not, can you establish one, as it will not only prevent you from similar problems when it comes to foreign currency payments but will also protect you from surprises in other areas (inventory, project, etc.)
Many thanks and best regards,
Ludwig
Dear Momen,
Yes, you are right with the scenario stated.
Please provide the basic explanation with respect to the working of the application. If it is correct the way system posted the exchange adjustment entries in two different month.so
Also I can not see 'unrealized gain/loss' being hit in our case.
Hi Chandra,
Following the explanation provided by Ludwig, there is a possibility to have the foreign currency revaluation reversed in a different date from the settlement date if the settlement was done before the foreign currency revaluation.
Please validate the below scenario:
1- Post invoice journal with foreign currency during May 2020.
2- Post payment journal and settle invoice during June 2020.
3- Run foreign currency revaluation for end of May 2020.
Regards,
Momen
Dear Ludwig,
Good Afternoon,
As I observed there is no unrealized gain/loss entry posted from Purchase order PIV023141. All the related voucher shared in the query from Vendor transaction and exchange adjustment. I will try to give you step process followed for these related vouchers.,although I have attached he exchange adjustment voucher passed for 31 May 2020.
Is it possible that when system check for this PO & same was settled on 1st June and being a exchange adjustment execution date as 2nd June 2020 (in our case), system posted the entry from PO in May month and reversal of settlement in next month (exchange adjustment voucher)?
Good morning Chandra Jain,
If the settlement occurs on June 1st I would expect seeing the realized gain/loss transaction being posted on that very day.
The previous unrealized gain/loss should be reversed as of the day it was created.
Question:
Can you provide us the different steps that were executed for this transaction so that we can try replicating it?
Also, can you share the related vouchers resulting from the foreign currency revaluation that was run on 31st May?
We need to see all vouchers and understand all the steps executed to give you a feedback on whether this is normal what you see or whether there is something going wrong.
Many thanks,
Ludwig
Dear Ludwig,
Thank you for your reply as expected:)
My only concern is why same voucher is posted on different date where as my exchange adjustment date is 31/05/2020. Purchase order get settled in 06/01/2020. Until 31/05/2020 PO was open. How system is functioning if you can explain it for better understanding?
Also as per your previous reply unrealized gain/loss is hitting two different accounting period i.e. May and June.
Hi,
When you post a PO that is recorded in a foreign currency, AX records this transaction with a specific exchange rate.
At the end of a month, you typically run an exchange rate revaluation, which gives raise to a unrealized currency exchange gain/loss.
At the time you make a payment, the unrealized currency exchange gain/loss is reversed and replaced by a realized currency exchange gain/loss based on the exchange rate that was valid at the time when the payment was made.
Assume that this might explain the voucher ending ...607.
Best regards,
Ludwig
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