Preventing and Correcting Unexpected FX Revaluation in Ledger Settlement

Finance and Operations/AX User Forum
1

In our USD company, we posted a GBP debit transaction in June 2023 and later cleared it in USD in September 2023.
We used Ledger Settlement to match the two transactions, and when we ran the 31/12/2023 FX revaluation, no adjustment was posted, as expected.

However, after running the Opening Transactions function in 2024, the GBP amount was brought forward even though its USD equivalent had already been cleared. When we ran the FX revaluation on 01/02/2024, the system posted an unexpected FX adjustment, recalculating the USD equivalent of GBP.

How can we prevent this issue in the future to ensure no unnecessary FX adjustments are posted?
What is the correct corrective action to fully clear the transaction in 2024 and ensure accurate financial reporting?**

2

Hello everyone,

I’m facing an issue with ledger settlement and the handling of opening transactions in a multi-currency environment, and I’d appreciate any insights on whether the suggested approach is correct.

Scenario:

  • My company’s accounting currency is USD.

  • I posted a General Journal in SGD on 01/06/2024:

    • **Dr Prepayment (Balance Sheet Account)**752.15

    • Cr Bank752.15

  • Later, I cleared the entry on 01/09/2024 in USD the company currency:

    • **Dr Expense Account (Profit & Loss)**531

    • **Cr Prepayment (Balance Sheet)**531

  • I then used Ledger Settlement to match these transactions.

  • After this, my Trial Balance for 2024 correctly shows a 0 balance.

  • When I ran the Opening Transactions functionality for 2025, the system brought forward both transactions as follows:

Date Year Closed Type Currency Amount in Transaction Currency Accounting Amount Amount in Reporting Currency
01/01/2025 No Opening USD -531 -531 0
01/01/2025 No Opening SGD 752.15 531 0

Suggested Fix:

It was recommended that I:

  1. Use Ledger Settlement during the year to match transactions.
  2. At year-end, create a manual journal entry to reverse and repost with a manually adjusted exchange rate to avoid issues with opening balances.

Question:

  • Is this the correct approach?
  • Would there be a better way to handle this scenario to ensure that opening balances don’t bring forward unmatched FX differences?
  • How do you typically handle this type of multi-currency opening transaction issue