Using Revaluation with the Revalue until True Rated Option Set

Ledger Revaluation calculates the unrealized exchange gain or loss for selected transactions by revaluing the transactions at the current exchange rate. When a transaction has been paid and/or matched, a fixed exchange rate applies to the transaction and a realized exchange gain or loss is calculated by the payment or matching process. These transactions no longer need to be revalued. Therefore, Ledger Revaluation usually only revalues 'open' transactions and excludes transactions with any of the following allocation markers: Allocated, Paid, Reconciled or Correction. You can also exclude transactions from the revaluation process:

  • For an account by setting the Suppress Revaluation option for the account in Chart of Accounts (COA).
  • For a journal type by setting the Exclude from Revaluation option for the journal type in Journal Types (JNT).

The Revalue until True Rated option that can be set on Ledger Setup (LES) changes the way Ledger Revaluation selects the transactions for revaluation. It uses the True Rated flag set on each transaction to determine whether or not a transaction should be revalued.

Note: The Revalue until True Rated option only applies if Ledger Revaluation is being used to revalue the Fourth currency from the Transaction currency, that is if the source is Transaction currency and the target currency is Fourth currency.

One of three true rated flags can be set on a transaction to identify the type of exchange rate that exists between the transaction currency and fourth currency:

  • Normally Rated - this indicates that the transaction references a currency rate which can be revalued using Ledger Revaluation
  • True Rated - this indicates that the transaction contains a fixed exchange rate and the transaction should not be revalued
  • Advanced Rated - this indicates that the transaction contains a fixed future exchange rate.

For example, when an invoice is paid in the fourth currency, the exchange rate that applied at the time of the payment is a fixed rate and the true rated flag is set accordingly.