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| Accpac tip about Accounting and I/C, O/E, P/O |
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Week |
July week 3 2011 |
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Subject |
Revaluation Codes |
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Details
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This form lets you define revaluation codes that you can assign to multicurrency accounts to specify how to revalue functional currency balances when exchange rates change.
Once you define revaluation codes, you can assign them on an account basis to each of the currencies which can be posted to an account (using the G/L Accounts form). See Before using.
You choose the Gain/Loss Accounting Method from the Company Profile in Common Services. The choices include:
• Realized and Unrealized Gain/Loss
• Recognized Gain/Loss
If you choose the Recognized Gain/Loss Method, and then save the Company Profile, you cannot go back to the Realized/Unrealized Gain/Loss method. Also, please note that if you use the Recognized Gain/Loss Method, you need to fill in Exchange Gain/Loss Accounts in the Revaluation Code forms for setting up revaluation codes that were set up previously, since G/L will not default the Unrealized Gain/Loss G/L accounts to the Recognized Gain/Loss G/L accounts.
To add revaluation codes
1. Click the New button and type the revaluation code. You can use up to 6 characters for the code (numbers or letters).
You can also just type the code and press Tab: G/L will assume you are adding a new code if it doesn't already exist.
2. Enter a Description of up to 60 characters.
3. Select the Rate Type. The rate type determines which exchange rate table will be used for the revaluation.
4. Enter a Source Code to assign to all transactions created with this revaluation code.
5. Enter or select the accounts to which exchange gains/losses will be posted. (Note that the labels on these fields change depending on the translation method selected in the Company Profile -- either Unrealized Exchange Gain / Loss Account, or Recognized Gain / Loss Account.)
If the account chosen in one of these fields has the Post To Account field set as Prohibited, you cannot select that account as the exchange account.
6. Click Add.
How revaluation works
When General Ledger creates a revaluation batch, it:
• 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, and posts one side to the unrealized exchange gain / loss accounts, or to the recognized exchange gain/loss accounts (and the other to the account being revalued).
When you create the revaluation batch, the revaluation code assigned to an account determines:
• The source code to assign to revaluation transactions.
• The exchange gain/loss accounts to which exchange differences will be posted.
• You then post the batch to update account balances.
Notes
• You must assign a revaluation code to each currency in each account that you want to revalue.
• Source codes specified in this form are defined using the Source Codes form.
• Rate types specified in this form are defined using the Currency Rate Types form in Common Services.
Before deleting a revaluation code
• Determine whether the revaluation code you want to delete is used with any accounts.
If it is, be certain to assign a different revaluation code to each of the accounts (using the Accounts form).
After using
• Print the Revaluation Code report to list the information defined using this form.
• Assign the revaluation codes to the relevant accounts and currencies.
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