Setting Up Revaluation
To enable accounts to be revalued, you must configure currencies and revaluation parameters on the accounts, and then create a posting structure for revaluation postings.
Typically, two or three accounts are involved in revaluation: the source account, target account, and revaluation account.
• The source account is the original GL account to which the transaction affected by revaluation was posted.
• The system account is the account that contains the exchange rate differences produced by the revaluation.
• The revaluation account is the account into which the revaluation results are posted—that is, the profit or loss.
Note: Only the system account and the revaluation account (for sub-ledger accounts) are used in the posting. However, for standard GL accounts, the source and revaluation accounts are the same, and the source account is also used in the posting.
Sub-ledger accounts require a separate target account for revaluation. The target account in these cases is a separate standard GL account, in which you post the exchange rate differences. These separate accounts are then reconciled to the general ledger.
For all account types, the unrealized loss or gain must be posted to one of the following accounts:
• Unrealized Exchange Loss
• Unrealized Exchange Gain
You can define only one of each type of account in a shared set, and you can configure only one set of revaluation accounts in each shared set. The system uses the same set of accounts for both transaction currency and statutory currency revaluation.
See
System Accounts for details on creating unrealized and realized loss/gain accounts.