Share
ReportHello,
Any guidance on how Dynamics can be configured to comply with IFRIC 22 would be appreciated.
In particular how one would configure the system to appropriately identify payments received from customers into the AR sub-module in advance of goods/services being performed and ensure that those amounts are neither revalued for FX at a month end until the good/service is delivered/performed and that when the order is ultimately invoiced it uses the exchange rate at the date of receipt of the funds and not the invoice date.
The reason for the above is that such amounts are deferred revenue. Deferred revenue is settled via delivering/performing goods or services and consequently the balance is not a monetary item as defined by IAS 21. This was confirmed by IFRIC as part of their interpretation on Foreign Currency Transactions and Advance Consideration (IFRIC 22). I am trying to find a solution as to how negative debtor balances that relate to this advance payment for goods and services (i.e. deferred revenue or will be earned when satisfying future performance obligations if we get into IFRS 15 world) can be excluded from revaluation as these aren't monetary items that should be revalued and the actual revenue value that is released when invoicing uses the original exchange rate at the time of the "prepayment".
I'm struggling to find guidance on how to do this and effectively comply with IFRS. Such balances, naturally having been received from a customer, end up in the debtors sub-module and will be negative until invoiced and shouldn't be revalued. Then when invoicing the sales order the value should equal the exchange rate when the cash was received, not on the date of invoicing. This is further complicated by the fact that these amounts are generally comingled in the AR sub-ledger with true debtors (where the customer owes cash) and negative balances that are in fact monetary items (for example where a customer makes a payment but it doesn't relate to any good or service and thus the could request to be repaid those funds).
Any guidance would be appreciated.
Thanks
All responses (
Answers (
335
