About Revaluation

Use the G/L Create Revaluation Batch screen to revalue the functional-currency equivalents of each specified source-currency amount using the exchange rate you enter.

When you create a revaluation batch, General Ledger:

Recalculates the functional-currency-equivalent values of source-currency account balances at new exchange rates.
Creates a transaction for the difference between the old functional-currency-equivalent and the new value, posting the difference to the account being revalued and to the unrealized exchange gain/loss accounts or to the recognized exchange gain/loss accounts.

The revaluation code assigned to an account determines:

The rate type that is used to display the default exchange rate.
The source code to assign to revaluation transactions.
The exchange gain/loss accounts to which exchange differences are posted.

Revaluation Methods

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.

Note:
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.

As an extra precaution, the system does not allow you to use the Create Revaluation Batch screen if there are unposted revaluation entries. You must delete or post any existing revaluation entries first.

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.)

Forcing Revaluation of Multicurrency Account Balances

The Create Revaluation Batch screen provides an option that lets you force the revaluation of account balances, for example, before preparing financial statements.

When you revalue a currency without forcing revaluation, only accounts that satisfy all the following conditions are revalued:

The account falls within the range of accounts you specify on the Create Revaluation Batch screen.
The account posts to the selected currency. (That is, the currency is listed on the currency tab of the G/L Accounts screen.)
Revaluation is set to Yes for the selected currency on the G/L Accounts screen.
A revaluation code has been assigned to the account for the selected currency on the G/L Accounts screen.

When you force revaluation, only accounts that satisfy all the following conditions are revalued:

The account falls within the range of accounts you specify on the Create Revaluation Batch screen.
The account posts to the selected currency.
Revaluation is set to No for the selected currency on the G/L Accounts screen.

If the currency is not listed (even if the account accepts posting from all currencies), the account is not revalued.

The default revaluation code you specify on the Create Revaluation Batch screen is used to revalue the accounts.