I’m currently working on a project to replace SAP with AX. I’m being told the FX reval has to be done at the transaction level which in many cases wil leave an open balance in the converted currency when the original entry is closed out. What I want is for the reval to compare at the GL account level to the original entry using the rate on the day the entry is closed. Is this possibly a setup issue or just the way it works?
Hi,
Can you explain with an example.
Regards
Thanks for your reply. I’m not an accouting expert but here’s how it was described to me.
On 3/1 we have 100 EUR which is equaly to 150 EUR
On 4/1 we have 100 EUR which is equal to 155 EUR so there is a gain of 5 EUR
On 5/1 we have 100 EUR which is equal to 140 EUR and the entry is closed.
If the reval is done at the transactional level when the account is closed it reflects a loss of 15 EUR (155-140). However the reality is that the account lost 10 EUR (150 from 3/1 opening balance minus 140 from the closing balance).
If the reval at the transaction level generates an entry for -15 an adjustment will need to be made as the net loss is really -10 when the account is closed.
What they want is for the reval to compare to the original entry at closing as that the real gain / loss. Apprently It doesn’t matter to them if interim revals are at the transaction level although I think it should be consistent whatever the solution is. Thx.
gain of as
If As it turns out the initial information provided was incorrect.
I am no expert, but if it was done at a transaction level it would be a 5 EUR gain for the first two and a 15 EUR loss for the second, so a 10 EUR loss overall, why would it ignore the starting point? The exchange difference revalues the original transactions, it is based on teh system date for the new rate, if run on the 5th this would be 140, you would only get a 15 difference if you had also revalued on the 4th creating a 5 gain on that day. I will set it up and confirm this when I get a moment.
Right - so you’re saying that it nets out all the differences from the start so the end result is -10. That makes more sense to me - sometimes the ‘experts’ explaining these things don’t know what they’re talking about. Let me know. Thanks.
Hi Jim
I loaded a general journal on a vendor on 26/10/09 for a EUR vendor. On 26th the rate was 75, on 27th it was 150, and on 28th 100.
I ran an AP exchange adjustment on 28th using the standard method and the difference sugest was 25 - my rate from the original entry on the 26th, and today the rate of today. The rate on the 27th would only take affect if I run it on the 27th.
I then ran it on 27th, the difference to profit was 75, when I then ran it on the 28th it reversed the transactions for 75 and reposted the 25 difference.
I am not an accounts consultant, but I can run through the process. I cannot however comment on what they have told you and why, or any exceptions to the simple example you have given. I also have not closed my entry, the preiodic revaluation only revalues open entries the posing of the payment would handle currency differences as well.
I suggest you trial it though if you can, or get them to explain with an example why it works the way they say!