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Hey - is anyone doing revaluation?? If so are you doing both realized and unrealized?? are you doing it to all balance sheet and income statement accounts? HELP!!!
Multicurrency drives me nutes!
Thanks
Rose
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Can anyone please help clarify this?
Hello everyone,
First of all, want to thank everyone that contributed to this thread. It has been really helpful in understanding a lot about Multicurrency and the Revaluation routine.
With that said, I have a question regarding the Revaluation Routine for the A/P Subledger. A client of mine runs the routine at month-end for the Unrealized Gain/Loss option. However, they run it as a Reverse Transaction (meaning they recognize the Unrealized G/L at the last day of the period, and reverse the first day of the following month). What we have noticed is that doing this just updates de G/L accounts but does nothing to the revaluation of the open A/P transactions, which means that while a Unrealized Gain/Loss was recorded at the G/L level, the A/P Aged TB does not consider the revaluation, causing discrepancies between the A/P module and the General Ledger. What the client expects is to run the A/P Aged Historical TB as of the last day of the period and have it balance with the A/P G/L account, even if that balance was reversed the next period.
Not sure if this is supposed to happen this way, but it begs the question, what's the point of running the A/P Revaluation routine with Unrealized G/L and a reverse transaction if it does nothing to the actual A/P module itself?
Is what my client doing make sense or should they just run the routine without reversing the Unrealized G/L?
Any help in understanding this would be greatly appreciated!!
- Ricardo
Ian and Debbie,
Thanks for the information. This is very helpful and I believe I definitely need to Revalue Payables. I do have one last question.
In the company, we have one checkbook that keeps dollars in Canadian dollars. There are increase adjustments/transfers, etc, where a daily rate is entered. How would I go about revaluing the checkbook? I only see Financial, AR, and AP to revalue, and revaluing Financial seems to only revalue GL accounts, not checkbooks.
Is revaluing a checkbook necessary and/or even possible?
Thanks so much!
Steve
Hi Steve, I agree with Ian's statement that GP does not force you to do it, but from an accounting standard perspective, if your receivables or payables are not collected within the same month they are recorded, it is accounting standards to record the AR/AP at the spot rate at month-end resulting in a calculated "Unrealized gain/loss" for those receivables/payables. That is what the Revaluation process does for you. if you use daily FX rates, all your fgn AR/AP will be booked at different rates. Revaluation brings them all up to the spot rate at time of reval aka month-end date. Your Finance Dept will probably want to perform this process.
Hope this helps.
Debbie Clark, CPA-CMA
Hi Steve,
No, you don't 'have' to run the revaluation routine. Only if you want / need to.
Multicurrency transactions are revalued when they are cleared. So, the postings to the gain/loss account that you are seeing - these are effectively revaluing the transaction when you apply and post the payments. they are accounting for the change in currency valuation between the rate of the invoice and the rate of the payment.
What you are then left with at say a month end, are invoices that are unpaid. The FX rate used on these invoices may have changed by month end - so in theory you could have an unrealised gain or loss. The revaluation routine allows you to calculate and create GL postings for this unrealised amount.
Depending on your currency exposure, the amount of change in the FX rate etc, you my choose to run a revaluation against your outstanding debt. But in system terms, you don't 'have' to run one.
Ian.
Hi Everyone,
I have a question, even after reading the thread.
We have to separate company dbs. In one company, we just use USD. In another company, we enter payables invoices and AP checks in USD AND Canadian Dollars. We enter the current exchange rate for each AP invoice and each check for Canadian vendors.
This converts the GL postings immediately to USDs when posting invoices for Canadian vendors, which is good. When cutting a check, there is an amount posted to the gain/loss account as well for the realized gain/loss.
My question is do I need to run the Revaluation routine each month for the financial series, even though the gl amounts are already stored in USD?
Any information would be much appreciated!
Thanks,
Steve
Hi Peter
Yes we do have Canadian (functional currency) inlcuded in the account. The opening trial balance was all entered as functional, and the first quarter end was revalued with a Canadian JE.
Do i now have to reverse those entries (in the current period?) so that the net functional = zero?
thanks for any advice.
Ian
I think you may have transactions in this account entered in the functional amount, which throws your math off.
If all transactions in the account were entered in USD in your case, then the balance in USD * avg rate calculated by GP = balance in CDN (before the revaluation).
I suspect that in your case you have some transactions entered directly in CDN in this account and they will not be part of the calculation.
Hi Peter
I have my revaluation set as period balances, and followed the manual, which as you suggest period balance will revalue the end full balance.
In our GP it is not doing what i anticipated, the manual says, or you suggest.
The particular account we have has a Functional -16,629,028.80 balance and originating 16,355,301.
Rate is .9923
The unrealized loss calculated is 95301.75
my math is 16,355,301 X .9923 = 16,299,365
that is a loss of 399,663
the issue is that the average ex rate is being used to generate the 95301
the revaluation report shows originating 16,355,301 X Avg rate .986473 = Functional 16,134,063, which does generate the 95,301.
How do i get GP to not use the avg ex rate to get the functional currency balance?
I want it to use the actual 16,629,028, not the calculated 16,134,063
the reference to the KB was to show where the avg rate is coming from. I really want GP to not do this calculation at all.
thanks!
You should use period balances for Balance Sheet accounts when you revalue them. The end result will be the full balance multiplied by the revaluation rate, which is correct.
I am not sure what formula you want to use, but in your example Great Plains will calculate 98 CDN.
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