Revaluing Second Base/Reporting Currency using Transaction Currency as the Source

This method of revaluation also generates unrealized currency gain or loss postings and is often required where a reporting currency is used. It fixes the exchange risk between the transaction currency and the reporting currency. It is also used for the euro model.

The following table indicates the values that are included on the revaluation posting, depending on which currency is the pivot:

Pivot is: Value 1 Value 2 Value 3 Value 4
Second Base X   X  
Transaction Currency     X  

Second Base Currency is Pivot

This is where value 3 is set as the second base currency rather than a reporting currency. This revaluation performs two calculations and includes two values on the revaluation posting as follows:

  1. The second base value is recalculated from the transaction currency.
  2. The base currency value is calculated from the revalued second base value.

Transaction Currency is Pivot

If the transaction currency is the pivot, then this is again the GAAP currency model where the exchange risk is taken by the parent company. This revaluation run would typically be the second of two revaluation runs. The postings from this second revaluation run are only posted to the reporting currency so are not shown in the local (base) currency books.

See Revaluation Using the GAAP Currency Model.