3
In France and in Luxembourg it is due to legal requirements not allowed to report a FX revaluation gain in month A and report a loss for the same transaction in month B, while there is still a gain based on the original amount.
Example:
Company ABC with accounting and reporting currency EUR.
Transaction -> loan (to third party) worth $1000 (€900) as per 15-01-2020.
Loan worth on 31-01-2020 $1000 (€1000) -> Unrealized profit of €100,-.
Loan worth on 28-02-2020 $1000 (€960):
Current situation in General Ledger -> FX revaluation
Unrealized loss €40,- (while you have a gain of €60 based on the original amount).
Current situation in AP/AR module -> FX revulation
First, the original revaluation will be reversed -> Unrealized profit - €100,-
Secondly, the actual gain/loss will be calculated -> Unrealized profit of €60,-.
As mentioned before, in France and Luxembourg, it is not allowed to have a gain in January and report a loss in February while it is basically still a gain.
The product suggestion: the same logic should be applied in the GL FX revaluation as it is applied in the AR/AP module.
Example:
Company ABC with accounting and reporting currency EUR.
Transaction -> loan (to third party) worth $1000 (€900) as per 15-01-2020.
Loan worth on 31-01-2020 $1000 (€1000) -> Unrealized profit of €100,-.
Loan worth on 28-02-2020 $1000 (€960):
Current situation in General Ledger -> FX revaluation
Unrealized loss €40,- (while you have a gain of €60 based on the original amount).
Current situation in AP/AR module -> FX revulation
First, the original revaluation will be reversed -> Unrealized profit - €100,-
Secondly, the actual gain/loss will be calculated -> Unrealized profit of €60,-.
As mentioned before, in France and Luxembourg, it is not allowed to have a gain in January and report a loss in February while it is basically still a gain.
The product suggestion: the same logic should be applied in the GL FX revaluation as it is applied in the AR/AP module.
STATUS DETAILS
Inactive
Comments
This should apply to bank revaluation also.
Category: General Ledger