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Dynamics 365 Community / Forums / Finance | Project Operations, Human Resources, ... / Forex Revaluation issu...
Finance | Project Operations, Human Resources, ...
Answered

Forex Revaluation issue on Vat Settlement

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Posted on by Ankit_Finance 137

Hi D365 Experts,

This is for European legal entity. Accounting currency is EUR and in Sales tax code currency is EUR. 

for month of November Sales Tax in USD 120 and In Euro 100. I have done Vat Settlement for Nov and below is my trial balance dt 30.11.21.

Opening Dr (Vat Settlement) Cr (Vat Payable) Balance
0 100 100 0

Now we run forex revaluation, system is calculating forex gain/loss for Vat payable Account. Why is this as transactions have settled, there should be net Zero gain/loss. Is there any solution to this issue?

TB after revaluation 

Opening Dr. (Vat Settlement) Cr. (Vat Payable) Balance
0 100 100 2

Thanks in Advance.

I have the same question (0)
  • Jacovdm3 Profile Picture
    Jacovdm3 152 on at

    Hi,

    Please run the Trial balance, select the main account, and then By currency in the Menu.

    Then if you see an amount in the transaction currency of a foreign currency it will be revalued.

    If the transaction is correctly settled, it needs to be on the same date, otherwise D365FO will see there is an exchange rate difference.

    I hope this helps, but there can be multiple reasons for the revaluation. Note that revaluation on main accounts is controlled by a parameter on the main account.

  • Ankit_Finance Profile Picture
    Ankit_Finance 137 on at

    Hi,

    Thanks for answering Jaco van der Merwe.

    Actually the amount is visible in transaction currency. Even if the amount is correctly settling in Vat payable ledger, transaction currency is not settling.

    Do you have any idea if Vat settlement have issues with forex currency transactions.

  • Verified answer
    Jacovdm3 Profile Picture
    Jacovdm3 152 on at

    Hi,

    Apologies for the delay in my response. In my experience we have never revaluated the VAT main accounts with GL revaluation. It gets covered in the AP/AR revaluation. Back to my first point to make clear what the logic is, with a GL revaluation, if enabled on a main account, it will revaluate any amount in the foreign currency transaction.

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