The base currency of an entity is British pounds (GBP). AR account 12785643 is denominated in Euros, and has a balance of €10,000. On the day of posting, €10,000 is equivalent to £6,800. However, at the end of GL period, €10,000 is equivalent to £6,600. Because the account is a sub-ledger account, a second account is required for the revaluation difference. The postings are as follows:

The balance of the source account is:

Therefore, the value of the account (£6,600) is attained by combining the revaluation GL account with the 12785643 AR account.

Revaluation posting to these accounts is automatic.

Revaluation postings for all balance sheet accounts are automatically reversed in the revaluation accounts on the first day of the following period.

Reversing revaluation amounts in a standard profit and loss GL account is optional. Select the Reverse P&L Revaluations field on the General tab of the Entity screen to enable this option for all standard GL accounts in an entity.

Typically, revaluation of profit and loss GL account is not required. However, it may be necessary in hyperinflationary regions where organizations restate their profit and loss using, for example, an average exchange rate for the quarter. See Setting Up Entities.