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.