Foreign currency journals

Foreign currency journals

Which journals are recorded in foreign currency those journals are called as foreign currency journals.

Steps required enter foreign currency journal

Step1:

Define conversion types:

Navigation:

Setup=>financials =>currencies=>rates =>daily

1.       Enter from currency.

2.       Enter to currency.

3.       Enter date.

4.       Choose conversion type.

5.       Enter conversion rate.

6.       Choose enter date by range to define conversion rates for week month year etc…

7.       Enter from currency.

8.       Enter to currency.

9.       Enter from date.

10.   Enter to date.

11.   Enter conversion type.

12.   Enter conversion rate.

13.   Save it.

Step2:

Enter foreign currency journal

Navigation:

Journals=>enter=>new journal

1.       Enter journal name.

2.       Enter journal description (optional).

3.       Select ledger.

4.       Select period.

5.       Select foreign currency.

6.       Enter lines

7.       Save and post it.

Additional information:

1.       You can choose any enabled currency except STAT.

2.       Enter the To - Currency - the currency to which you want to convert. If you enter the same currency as your from - currency, you will receive an error.

3.       You cannot select the rate type of User. Enter User rate directly on the Enter Journal window when creating a foreign entered journal.

4.       If your conversion rate type is assigned to a definition access set, you must have Modify and View privileges to the conversion rate type to create new rates.

5.       The conversion Date should be within the accounting period you defined for the journal entry but the Date field allows other entries in case you want to use a different period's daily rate. The conversion date is the posting date for the journal entry.

6.       If you don't choose a conversion date, General Ledger uses the default effective date of the journal.

7.       The conversion Type can be the Spot, Corporate, or User type, or any conversion type you defined. If your conversion rate type is assigned to a definition access set, you must have Use privilege to select it

8.       You must enter a conversion Rate if you enter User as the conversion type. If you specify a conversion type other than User,

9.       General Ledger automatically enters the daily conversion rate based on the rates you entered in the Daily Rates window.

10.   Enter your journal lines, using debit and credit amounts in the entered currency. General Ledger automatically converts the entered amounts into your ledger's currency based on the designated conversion rate.

11.   Use the scrolling region to review the results of your currency conversion. You can override the Converted Debit and Converted Credit amounts if you enable the user profile option Journals: Allow Multiple Exchange Rates.

Types of Conversion rates:

Use conversion rate types to automatically assign a rate when you:

1.       convert foreign currency journal amounts to your ledger currency equivalents

2.       run Revaluation

3.       run Translation

You enter daily conversion rates for specific combinations of foreign currency, date, and conversion rate type. When you enter a foreign currency journal, General Ledger automatically displays the predefined exchange rate based on the currency, rate type (unless you are using the User rate type), and conversion date you enter. When you have a User rate type, you enter the rate directly when you enter a foreign currency journal.
Note: If you want to enter different daily rates for the same combination of from-currency, to-currency, and conversion date, you must define separate conversion rate types.
General Ledger provides the following predefined daily conversion rate types:
Spot: An exchange rate which you enter to perform conversion based on the rate on a specific date. It applies to the immediate delivery of a currency.
Corporate: An exchange rate you define to standardize rates for your company. This rate is generally a standard market rate determined by senior financial management for use throughout the organization.
User: An exchange rate you specify when you enter a foreign currency journal entry.

Revaluation

Revaluation

Revaluation is process of converting foreign currency to functional currency. It is available in 2 modules

1.       General ledger

2.       Fixed assets

In general ledger revaluation process is used to update current assets and current liabilities. Current assets are going to comes from account receivables, current liabilities comes from accounts payables.

In fixed assets revaluation process is used to  assets by giving the latest market price. Generally revaluation will do at “month-end” process to know the status of current assets and current liabilities. 

Steps required for revaluation:

Step1:

Define unrealized gain and loss account at our chart of accounts:

Navigation:

Setup=>financials=>flexfields=>key=>values

1.       Choose application as general ledger.

2.       Choose title as accounting flexfield.

3.       Choose our structure.

4.       Choose account segment.

5.       Select new line.

6.       Enter account number and description select account type is liability.

7.       Save and close.

Step2:

Define a revaluation rate for each currency for each period or date for which you want to run revaluation.

Step3:

If you use Reporting Currencies, define a Cumulative Translation Adjustment account for your ledger.

Step4:

To revalue your account balances:

Navigation:

Currency=>revaluation

1.       Enter revaluation name.

2.        Enter a Description (optional).

3.       Enable Auto Post Revaluation (optional).

Note: If enabled, the revaluation journal is automatically posted when the revaluation process completes.

4.       (Optional) Select the Enable Security checkbox to apply Definition Access Set security to your revaluation definition.

5.       Choose a Currency Option.

All Currencies: all balances for which the appropriate conversion rates are defined will be revalued.

Single Currency: only balances for the specified currency will be translated. You must choose a currency from the List of Values in the Currency field.

6.       Choose Rate Options.

Daily Rates: Revaluation will use daily rates of the specified Type to revalue balances. You must choose a type from the Type field.

Type: Revaluation will use this type when you select Daily Rates. The List of Values includes all defined conversion rate types, except User, that are not secured with definition access sets or that are assigned to your definition access sets with Use privilege.

One-Time: Revaluation uses the specified rate to revalue balances. You must specify a rate in the Rate field. One-Time is only available if you choose Single Currency in the Currency Options region.

Rate: Revaluation will use this rate when you select One-Time. Enter a rate greater than 0.

Note: If different rates are required for different ranges of accounts, for example spot rates for balance sheet accounts and average rates for income statement accounts; define separate revaluations for each class of accounts, using a different rate type for each.

7.       Enter accounts for the Unrealized Gain and Unrealized Loss accounts. The account can be the same for both fields. The company segment appears blank and is not required.

8.       All debit revaluation adjustments are offset against the unrealized gain account and all credit adjustments are offset against the unrealized loss account. If the same account is specified in both fields, the net of the revaluation adjustments is derived.

9.       Complete the fields in the Revaluation Ranges region.

Account Low: specify the low end of the range of accounts you want to revalue.

Account High: specify the high end of the range of accounts you want to revalue.

Note: Expand Parent Company and Expand Natural Account fields are automatically checked       when you specify the same parent account in the low and high account ranges. These are display only fields.

10.   Choose Revalue. Your revaluation is automatically saved and the Submit Request window appears. Complete the fields.

Mass Allocation

Mass Allocation

A single entry formula that allocates revenues and expenses across group of cost centers, departments, divisions, or cost centers.

Steps to create mass allocation journals:

Step1:

                                Define usage factors as the accounts in our chart of accounts.

Navigation:

                                Setup=>financials=>flexfields=>key=> values

1.       Select application as a general ledger.

2.       Select title as an accounting flexfield.

3.       Select our structure.

4.       Select accounts segment

5.       Enter value and description.

Step2:

Define parent and child relationship to segment:

Navigation:

Setup=>financials=>flexfields=>key=> values

1.       Select application as a general ledger.

2.       Select title as a accounting flexfield.

3.       Select our structure.

4.       Select cost center segment.

5.       Enter value and description.

6.       Enable parent check box.

7.       Choose define child ranges.

8.       Select all child values.

9.       Save your work

Step3:

Create cost pool journal and post:

Navigation:

Journals=>enter

Step4:

Create and post statistical journal:

Navigation:

Journals=>enter

Note: currency should be stat currency.

Step5:

Create Mass Allocation Batch:

Navigation:

Journals=>define=>allocation

1.       Enter Mass Allocation Batch name.

2.       Select balance type actual or encumbrance.

3.       Enter description (optional).

4.       Enable security check box (optional).

NOTE: Enable Security checkbox to apply Definition Access Set security to your Mass Allocation formula.

5.       Choose formulas to enter Mass Allocation Batches.

6.       Enter Mass Allocation Formula name and category.

7.       Enter description (optional).

Note: You can choose a ledger currency, or an entered or STAT currency.

8.       Enter formula lines using the formula A*B/C.

9.       Enter target and offset account.

10.   Save your work.

Generate Mass Allocation:

Generate Mass Allocation to validate and create un posted journal batches based on your Mass Allocation formulas. The generated journal batch contains one entry for each allocation formula in the batch.

Navigation:

1.       Enter ledger set.

2.       Enter balancing segment value.

3.       Specify the Allocation Method for the Mass Allocation batches you are generating.

4.       Enter the Batch Name for each validated Mass Allocation formula batch you want to generate.

5.       Enter the Period for which you want to generate Mass Allocation journals

6.       Enter a Journal Effective Date

7.       Choose generate.

8.       Review the journals.

Additional information:

1.       Enable security check box is used to apply definition access set security to your Mass Allocation formulas.

2.        You can choose a ledger currency, or an entered or STAT currency.

3.       Full cost poll allocation to have rounding differences added to the cost pool with the largest relative balance. If you do not choose this option any rounding differences will remain in the original account.

4.       In formula A is the cost pool that will be allocated it can be amount or account balance.

5.       In formula B is the numerator of the factor (a number or statistical account) that multiples the cost pool for the allocation.

6.       In formula C is the denominator of the factor (a number or statistical account) that multiples the cost pool for the allocation.

7.       Parent values can be used in one or more segments. to improve performance keep the number of parents to a minimum.

Looping (L):

Assign this type to a ledger set segment value. The allocation program runs each formula once for each ledger in the ledger set. You can only loop on ledger set segment values.

Assign this type to a parent segment value to include each child value assigned to the parent value in the formula. The allocation program runs each formula once for each corresponding child segment value. You can loop only on parent values.

Summing (S):

Assign this type to a ledger set segment value to sum the account balances of all the ledgers in the ledger set. You can only sum on ledger set segment values.

Assign this type to a parent segment value to sum the account balances of all the child segment values assigned to a parent. For example, if you enter a parent that has five child values, the allocation program adds the account balances of the five child accounts and uses the sum in each Mass Allocation formula. You can sum only on parent values.

Constant (C):

Assign this type to a single ledger segment value. You can only use this segment type for a single ledger for the ledger segment.

Assign this type to a child segment value to use the detail account balance associated with the child. You can use this type with a parent segment value only if there is a summary account associated with the parent.

Note: To use summary accounts in a mass allocation formula, all segments in the formula must be assigned a segment type of Constant.

Target and offset accounts:

These are the lines that are actual journal entry.

Target:

Enter an account in the target line to specify the destination for your allocations. The parent value used in target must be the same parent value used in the B and C lines for the formula.

Offset:

Enter an account in the offset line to specify the account to use for the offsetting debit or credit form your allocation. The offset account is usually the same account as formula line A to reduce the cost pool by the allocated amount.

                 

       

Recurring journals

Recurring journals

The journals which are repeated one or more periods or more than once in a period is called as recurring journals. Such as fixed utilities, rent, wages salaries etc…

In application recurring journals are classified in to three types:

1.       Standard journals.

2.       Skeleton journals.

3.       Formula journals.

Standard journals:

                Standard journals use fixed account combination and amounts each accounting period. You enter a journal using constants. For example monthly rent, salaries, with constant amounts charged to the same account.

Skelton journals:

                Skeleton journals are having varying amounts in each accounting period. You can define recurring journals without amounts, and then enter the appropriate amounts each accounting period. There are no formals to enter, only account combinations. For example, you can record temporary labor expenses in the same account combination every month with varying amounts due to fluctuations in hours.

Formula journals:

                A formula entry is recurring entry that uses formulas instead of amounts to calculate amounts. For example calculate rent expenses based on end-of-month head accounts.

To define recurring journals Templates:

Navigation:

                                                Journals=> define => recurring

1.       Enter Batch name.

2.       Enter description (optional).

3.       Select batch type single ledger or multiple ledgers.

4.       Enter journal name.

5.       Select ledger.

6.       Enter category.

7.       Select currency.

8.       Chose lines.

9.       Enter line number in the field.

10.   Enter the account.

11.   Enter line description (optional).

12.   Enter standard amount.

13.   Save your work.

14.   Add new line.

15.   Enter line number in the field.

16.   Enter the account combination.

17.   Enter line description (optional).

18.   Enter standard negative amount.

19.   Save your work.

NOTE:

·         Enter Expenses account (Debit Account),liability account(credit account) and the amounts for Standard Recurring Journal

·         Enter only Debit and credit accounts for skeleton recurring, do not enter amount.

·         Enter debit account & enter the formula  for Formula recurring journal

·         In formula recurring journal do not enter amount for line 2. System will add all the debit lines amount and consider the credit amount as offset account.

To Generating journals:

                                                Navigation:

                                                Journals=>generate=>recurring

1.       Select batch name.

2.       Select period.

3.       Click on generate.

To checking journals:

Navigation:

Journals=>enter

·         Select source is recurring.

·         Click on find.

·         Now you can see the journals.

·         Post the journal.

NOTE: For Skelton recurring journal you can enter amount in journals lines before you post the journals.

Additional information:

1.       In which period we are going to create recurring journals, that period must be opened.

2.       Single ledger batches affect only one ledger in the batch.

3.       Multiple ledger batches can affect multiple ledgers in the batch. You can define recurring journal formulas across ledgers.

4.       Single ledger need to provide ledger name at batch level.

5.       Multiple ledger need to provide ledger name at journal level.

6.       According to recurring template negative amounts are credits and positive amounts are debits.

7.       If you want to run a recurring batch for multiple ledgers from responsibility that responsibility should have access to the data of multiple ledgers.

8.       You can only define single ledger batch types for budget formulas.

9.       You can use Automatic Journal Scheduling to generate your recurring journals according to a specific schedule you define.

10.   We can enter 9999 lines in a recurring journal. In which 9998 lines are for debit lines and only one line is for credit line. We call this line as offset account line. Hence we have to enter line 2 as an offset line and key in the number 9999 in line 2.

11.   Do not enter amount for line 2. System will add all the debit lines amount and consider the credit amount as offset account.

12.   If you wish to enter more credit lines, we have to give negative sign for the lines, for example -9998, -9997 etc.

                               

               

Suspense Journals

Suspense Journals

Suspense account is used to balance the unbalanced journal entries. Suspense account will added automatically when you are going to initiate for posting.

Steps required for suspense journals:

Step1:

Define suspense account at our chart of accounts

Navigation:

Setup=>financials=>flexfields=>key=>values

1.       Select application title structure and segment.

2.       Add new line.

3.       Enter value description and qualifiers.

4.       Save your work and close.

Step2:

Map the code combination of suspense account at our primary ledger:

Navigation:

                                Setup=> financials=>accounting setup manager=> accounting setups

1.       Select ledger name and click on go.

2.       Select update accounting option tab.

3.       Update primary ledger.

4.       Click on next.

5.       Enter suspense account code combination.

6.       Click on finish and close it.

Step3:

1.       Post unbalanced journal.

2.       Require the journal.

NOTE: now you can see one more line was add by system with difference amount.

Step4:

NOTE: If you want to define suspense account for specific source and category then navigate to

Setup=>accounts=>suspense

1.       Enter ledger, source, category and account.

2.       Save your work

Additional information:

1.       Even though you have mapped the suspense account only for one balancing segment system automatically creates for the remaining balancing segments also.