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Dynamics 365 Community / Forums / Microsoft Dynamics AX (Archived) / Ledger transactions
Microsoft Dynamics AX (Archived)

Ledger transactions

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Posted on by lally 19,790

Hi All ,

A purchase order is created with foreign currency and observation is that voucher transactions created with PO currency code also.

Company currency - USA
PO currency  - AUD

Ledger balances will always be maintained in the company currency only . 

The question is that why the application creates voucher transactions with AUD also ,in addition to company currency for inventory , Sales tax , Misc charges types. 

What is the logic behind this and advantage of this ?

*This post is locked for comments

  • Suggested answer
    ZvikaR Profile Picture
    ZvikaR 89 on at
    RE: Ledger transactions

    I disagree from the opinion expressed here that the original foreign currency transaction is not important.

    From an accounting point of view it is very meaningful to keep track of the original transaction in the original currency.

    Any portion of the transaction that is posted into a balance sheet account (Accounts payable balance, or other liability account or foreign currency balance in a bank account etc.) creates a value that is not static.

    If a company has a balance in foreign currency, its value shifts constantly with the shifts in conversion rates.

    A company is required to track and report these changes of value, hence it is not enough to record foreign currency transaction in the accounting currency only.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Ledger transactions

    Hello lally,

    Theoretically, you do not need the foreign currency amount.

    Yet, if you do not record the foreign currency amount, you need to do a lot of calculations and documentations outside of your system.

    As an example, foreign currency invoice amounts need to be converted in the accounting currency e.g. in Excel.

    When you pay foreign currency invoices you would have to calculate accounting currency amount when the invoice was posted and the difference to the amount when it is paid to calculate and post the FX gain / loss that you have to post in accounting currency.

    All of that need to be documented and recorded for your auditors somewhere.

    Therefore, it is much easier posting in foreign currencies directly and letting AX do the rest of the job :-)

    Best regards,

    Ludwig

  • lally Profile Picture
    lally 19,790 on at
    RE: Ledger transactions

    Thanks for the reply Ludwig ,

    [quote user="Ludwig Reinhard"]Even though you do not really need the AUD for accounting/reporting, we still need it to enter - for example - invoices and also to run foreign currency revaluations in case the invoice is still open at the end of the month/year.[/quote]

    I agree with you if the application limited to Purchase order and vendor subledger ( VendTrans) for information purpose and Vendtrans table is source for foreign currency revaluation.

    Still i'm clueless the importance to post the voucher transactions in foreign currency in addition to local currency, how does it really help in the accounting world to accountants.

  • Suggested answer
    Ludwig Reinhard Profile Picture
    Ludwig Reinhard Microsoft Employee on at
    RE: Ledger transactions

    Hello lally,

    If you get a foreign currency invoice - let's say in AUD - you probably do not want to take our your calculator and calculate the USD amounts that you enter in your system. What you will do is switching the currency, entering the invoice in AUD and expecting the system to calculate the USD amounts for you. Even though you do not really need the AUD for accounting/reporting, we still need it to enter - for example - invoices and also to run foreign currency revaluations in case the invoice is still open at the end of the month/year.

    Best regards,

    Ludwig

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