How are the Revaluation Differences Posted?

Ledger Revaluation revalues one currency against another, on a group of transactions. For the revalued currency, it also calculates the difference between the original and revalued amount on each transaction. Ledger Revaluation can optionally post this revaluation difference to the ledger.

This revaluation difference is either an unrealized currency gain or loss or a balancing adjustment. If you are revaluing a transaction currency (value 2 or value 4) against another currency, the difference reflects an unrealized currency gain or loss.

Alternatively, if you are revaluing between the base and second base/reporting currencies, the difference is a balancing adjustment resulting from a rounding error.

What Postings are Generated?

The revaluation differences can be posted as detailed or consolidated revaluation postings.

At one extreme Ledger Revaluation can post a revaluation transaction per account for every analysis code, currency and asset combination for each period. At the other extreme it can post a single revaluation posting for each currency, for each ledger per year.

Different postings are generated for unrealized gain/loss postings and balancing adjustment postings.

The cumulative effect of previous revaluations is also taken into account. To minimize the number of transactions that risk crossing from the gain to the loss account you can choose to run Ledger Revaluation on a quarterly or annual basis, or run the gain and loss processes separately rather than using the post gains and losses separately option in a combined Ledger Revaluation run.

The Unrealized Gain/Loss Postings

If you select to post detailed revaluation gain or loss transactions, Ledger Revaluation generates postings to the following accounts:

  • the account on the revalued transaction for the revaluation difference(s) calculated for the transaction
  • the specified Unrealized Net or Losses and Unrealized Gains accounts, for the total of all the gains or losses, or the net gain/loss.

The unrealized gain and loss accounts can be specified either in Currency Codes (CNC) or in Currency Period Rates (CNP). If the accounts have not been specified in either of these areas, they are determined by your specifications in Ledger Revaluation Profiles (LEP). Do not select a memo account.

The method used to post gains and losses is determined by the Exchange Gain/Loss Post Rule field in Ledger Setup (LES). This field controls the unrealized gain and loss account fields that appear on Ledger Revaluation.

If you choose to consolidate the revaluation transactions across several accounts, for example by account type, the postings are made to the Consolidated Gain or Consolidated Loss account instead of the individual transaction accounts.

Note:  If revaluation postings are being generated in detail and the transactions for a single account contain more than 2000 different combinations of analysis codes, currency codes, asset code and asset indicator, more than one revaluation transaction can be produced for each combination.

The Balancing Adjustment Postings

If you select to post detailed balancing adjustment transactions, Ledger Revaluation generates postings to the following accounts:

  • the account on the revalued transaction for the revaluation difference(s) calculated for the transaction
  • the balancing account specified for the chosen target currency in Business Unit Setup.

If you choose to consolidate the revaluation transactions across several accounts, for example by account type, the postings are made to the Consolidated Gain or Consolidated Loss account instead of the individual transaction accounts.