The revaluation code assigned to an account determines:
The Gain/Loss Accounting Method selected for your company (on the Company Profile screen in Common Services) determines how exchange gains and losses are calculated. The choices are:
Realized/Unrealized Gain/Loss Method. This method records transactions for the unrealized gains and losses in each fiscal period you revalue. Revaluation creates an automatically reversing entry for the difference between the original functional‐currency equivalent balance and the revalued functional‐currency equivalent balance in each fiscal period you revalue. Because the transactions automatically reverse, the effect of revaluation is completely backed out in the fiscal period following the last fiscal period you specify for revaluation.
If you revalue accounts in the last period of a year, you must create the new year before you post the revaluation batch because the reversing entry will be posted to the new year.
You must specify unrealized exchange gain and loss balance sheet accounts for a revaluation code before you can create a revaluation batch using that code.
Recognized Gain/Loss Method. Under this method, revaluation transactions are considered permanent, so no reversing entries are created.
Entries are assigned to the next open batch, which you can view, edit, and post in the same way as other batches.
Note: You must specify recognized gain and loss income statement accounts for a revaluation code before you can create a revaluation batch using that code.
The program uses the session date to determine the default period for revaluation. If you specify a range of periods, the system warns you to check your selection carefully, because the transactions will be revalued permanently.
Note: If you choose the Recognized Gain/Loss Method, and then save the Company Profile, you cannot revert to the Realized/Unrealized Gain/Loss method. Also, you must specify Exchange Gain and Exchange Loss accounts for each revaluation code. (The program does not use the Unrealized Gain/Loss accounts specified under the Realized and Unrealized Gain/Loss method as default Exchange Gain and Exchange Loss accounts.)