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When running the currency revaluation for the general ledger, it is only possible to separate the accounts to which the currency profit/loss is posted to is only able to control per ledger or per currency.

However, it difficult to fulfil the IAS 21 requirements on how to handle exchange differences. 

The IFRS (IAS 21) states that you should report exchange differences differently depending on if they arise from monetary or non-monetary items. Furthermore, exchange differences they should even be posted to different accounting classes (equity vs profit or loss) depending on the source (monetary/non-monetary).

The only way to control this would be if it was possible to set the unrealized/realized profit/loss accounts for currency revaluation on an account level but as this is not possible in D365 for Operations the only advice we can give the customer is to either treat revaluation manually for one of the item types, manually reverse and re-post part of the transaction or run the revaluation multiple times and between the runs change the setup on the ledger/currency back and forth.

However, due to the massive manual work this will cause the customer and the fact that it is an IFRS requirement driving this, this should be consider as a new funciotnality for future versions.

 
Category: General Ledger
STATUS DETAILS
Under Review
Ideas Administrator

Thank you for the suggestion. IAS 21 represents the effects of foreign exchange rate changes on financial statements. You should be able to accomplish this by using the Consolidation functionality in Operations. On the Consolidate Online form, when you choose Legal entities, you can pick whether the translation adjustment goes to the accounts defined by the P&L or the Balance Sheet. The accounts are defined in Accounts for automatic postings.

Likewise if you are using Financial reporting for a consolidation, you can pick the account you want to use on the Row definition. Both solutions should accomplish this. If it is not, can you please respond with more details?  

Sincerely,

April

PM Microsoft

Comments

C

April, we have a client who also needs this functionality enhanced. The topic shows Under Review. Is this actually being considered for a future release? If so, can you provide visibility into when? If not, can you supply a reason why? Respectfully, attempting to perform this through consolidation is not the right solution.

Category: General Ledger

C

The consolidation only allows to post to the B/S for consolidation difference which is different than FX revaluations

Category: General Ledger

C

Revaluation should also used different accounts for profit/Loss based on module account payable / Receivable.

Category: General Ledger

C

Agree. I need it for one of the design...

Category: General Ledger

C

Thanks April for your comment.


But I don’t think that the Consolidation functionality can achieve the IFRS IAS 21.


The problem is to use P&L revaluation account for some transactions and BS revaluation account for other transactions in the same time. So, we need to be able to define at least two main accounts for each type of revaluation (realized/unrealized, gain/loss). P&L accounts must be used for non-monetary item and BS must be used for monetary item.


So, I think that the easiest way to choose the right main account is to add a setup on each main account. I totally agree with Cristina. As it is already possible to define it by currency, it seems to be possible to achieve it.


Please let me know if you want me to send you a quick PowerPoint file of what I am thinking about.


Thanks in advance to think about this.

Category: General Ledger

C

 Agree with suggestion given by Eugen.


Exchange differences arising from monetary and non-monetary items can be different to mere P&L and Balance sheet items; so a separation would be very useful way.

Category: General Ledger

C

I think a possible work around is to perform the revaluation through the consolidation functionality.


Consolidation company allows to set each ledger account with different exchange rate to use for revaluation, and (in a clunky way) allow to send revaluation of monetary to a different account from the revaluation of the non-monetary.

Category: General Ledger

C

Agree. I even have a functional design on this:


+ a new type (combo box) Monetary/Non-monetary on the Main account screen


+ separate rev. accounts for the AR and AP modules

Category: General Ledger

C

Thank you Cristina for suggesting this feature. It is a common request from accountants, especially when doing revaluations for intercompany balances, that with allowing revaluation of bank balances directly in the Cash and Bank Management volume.

Category: General Ledger