D365 F&O posted transactions which lead to a significant prolongation of the P&L, which is forbidden by local HGB rules for example § 256a HGB.

Therefore, our auditors informed us that we had to post a manual adjustment between the main accounts “Unrealized foreign exchange gain” and “Unrealized foreign exchange loss”. The adjustment amount was over 6,000,000 Euro for one year.

The reason for this prolongation were postings for bank accounts in USD created by the foreign currency revaluation in the module “Cash and bank management”. The amounts posted through the monthly revaluation are getting higher and higher each month for our bank accounts in USD. Our accounting currency is EUR.

Via a support case Microsoft suggests solving the problem by posting all foreign currency revaluations without financial dimensions. However, as the accounts are P&L accounts, this is not possible for us. Our headquarters need a breakdown for all P&L accounts based on certain financial dimensions. Microsoft confirmed that the posted amounts are huge but have consistent calculations and are not discrepancy in the data.

All adjustments requested by our auditors during the yearly audit must be reported and explained to our headquarters. We would like to avoid the manual adjustments in the future because in the past with SAP they also have not been necessary.

We analyzed the issue and believe it is incorrect that the foreign currency revaluation for bank accounts also considers the vouchers from the fiscal year closing.

To avoid in the future these high amounts posted on “Unrealized foreign exchange gain” and “Unrealized foreign exchange loss” by the foreign currency revaluation we suggest that Microsoft excludes all year-end closing vouchers from the revaluation process for bank accounts in a future release.