Currency Revaluation

Foreign currency revaluation may be performed at the end of each financial period. All the transactions which have open items, and items which are posted in general ledger with foreign currencies may need to be revalued based on the exchange rate set in the company settings. Based on the valuation date, the currency revalation process will trigger a gain or loss which is calculated and posted to the foriegn exchange rate gain/loss account.To start currency revaluation, Click on Financial Professionals > Currency revaluation.

Currency revaluation is available for:

•   The main accounts of the unrealised accounts payable and accounts receivable.
•   Balances in foreign transaction currencies (cash bank and loans)
•   The reporting currency for all other accounts.

Additionally a setting is present to exclude nominal accounts from all revaluations. 

Currency revaluation module

The Currency revaluation module gives an overview about generated and posted currency revaluations and

their status.

The available periods are shown per chosen year. When processing your currency revaluation, depending on the stage, the various icons below will be displayed.

Generate a new currency revaluation for the chosen period.

Delete a currency revaluation.

View the details of the currency revaluation.

 Make the proposed transaction provisional.

 Make the provisional transactions final.

When this icon is shown the option is not yet available, because there are some provisional transactions in a previous period.

 A process is running in the background, which maintains the currency revaluation. Click this icon in other to update the status.

 A warning / error is given when performing the last action, hover with the mouse above this icon to read the content

The following statuses can be shown:

The possibility to create a currency revaluation depends on the period settings: the option is only available if the period that needs to be revalued is open. If revaluation of unrealised accounts payable and accounts receivable is checked in the settings the next period must be open as well.

This is because the transactions created in the revaluation period are automatically reversed in the next period.

Settings

Before creating the first currency revaluation it is advised to review and optionally change the settings; this is done by clicking the settings button on the Currency revaluation page. In this settings page it is possible to:

•  Specify whether provisional transaction are to be taken into account;
•  Select which type(s) of revaluations must be used;
•  Revalue customer and supplier open amounts.
•  Revalue foreign currency balances (you can select multiple foreign currency bank accounts by clicking the ‘Add’ general ledger icon)
•  Revalue balance sheet and profit and loss (you can also exclude accounts from the revaluation process by selecting the accounts; click the arrow to move the accounts over to the window on the left).

After completing the settings, when clicking the 'Save' button the settings will be saved.

Note: Changes to the settings  will only influences new revaluations: all proposed, provisional, or final revaluations will not be affected.

Generating Currency Revaluation

Within the Currency revaluation screen, click on the star icon ( ) in front of the period in which the revaluation is to be posted.

If “Revalue reporting amounts of balance sheet and profit and loss accounts” is checked, an intermediate page is opened and the currency rate for the revaluation of the profit and loss accounts is requested, where the rate of the last day of the period is offered as default.  

Please note: If the reporting currency equals the base currency, this field will disabled.

Transactions on accounts payable and accounts receivable are included in the currency revaluation if the status is open or the transaction is paid after the end of the period related to the currency revaluation period.

Please note: All open transactions at the end of the period will be revalued.

Balances in foreign currencies are included in the currency revaluation if the ledger is linked to a currency in the currency revaluation settings and that currency is the only currency in which a balance is present on that ledger. If balances in other transaction currencies are present the revaluation will return an error.

Transactions on other accounts are included if they are part of the period that is being revalued or any prior period that is not revalue yet. All prior, not yet revalued periods are then set to skipped.

Note: All revaluation related accounts (like the Exchange rate differences) are automatically excluded; furthermore, there is the option to exclude certain accounts from revaluation as well.

A proposal will be generated if there are any transactions that satisfy this condition based on the applied currency rate (which is last day of the currency revaluation period) and there is a difference in transaction /base currency and/or reporting currency depending on the selected types.

View details

Click the magnifying glass icon ( ) to view the currency revaluation details.

An overview of the proposal which details the transactions that will be revalued at the related currency rate are shown.

The page shows per dimension the ‘Current’ amounts, the ‘Rates’ that should apply, the ‘Desired’ amounts based on these rates and, based on these (desired – current) the ‘Remainder’ amounts that will be posted as Exchange rate differences. The accounts which are used to post the differences are set in the Setting page.

Delete

The currency proposal can be deleted by clicking the ‘Delete’ icon ( ). All periods that are skipped because of this period, and all later revalued periods, are deleted as well.

Provisional

At this stage the currency differences are posted and all transactions are revalued again, based on the currency rate of the related period the status of the currency revaluation is now provisional ().

Please  note: Even if there is a difference between the Proposal and the Provisional transactions, the transactions are posted. The user is warned about the differences.

Final

As soon as a currency revaluation is posted final, it is no longer possible to create a currency revaluation for previous periods and the related period.

Once the currency revaluation proposal is made final, all transactions are revalued again, based on the currency rate of the related period. If there is a difference between the proposed transactions at the moment the currency revaluation is posted provisional, and the moment the currency revaluation is posted final, the transactions are NOT posted. A cause can be entering a new transaction between the moment of posting a currency revaluation provisional and final, a change in the settings or a change of the currency rate.

The provisional postings are updated and by finalising them again, the transactions are posted final.

A currency revaluation proposal cannot be made final, if there are provisional transactions in its period or in previous periods.

Provisional transactions

In the Provisional transactions a new daybook is shown: Currency Revaluation

When clicking the magnifying glass, a new page is opened.

Provisional: The currency revaluation can be run multiple times, however once the currency revaluation has been made final all related provisional transactions are deleted, the currency revaluation is generated once more, and the process cannot be reversed.

Currency revaluation Example:

Customer/Supplier: Currency Revaluation:

Twinfield goes through all outstanding invoices and recalculates based on the invoice (document) currency; the outstanding amount is calculated on the base and reporting currency.

Supplier open invoice amount is $1000, original USD-GBP rate 1.5 (the original base value GBP 667).

The current USD-GBP rate is 1.75 (GBP 571). The proposed revaluation is 667-571=GBP 96.

£96 will be posted against the P&L currency revaluation account, nominated account or dummy supplier account. Please Note: It is not possible to post the revaluation to the individual supplier accounts.

Base/Reporting Currency Revaluation:

This looks at the balance in base and reporting currency of each nominal (Please note: the nominated account must not sub-analysed with a ‘Debtors/Creditors’ type) and works out what the reporting value will be based on, the current or specified exchange rate. If there is a difference between the calculated reporting value and the recorded reporting value, a proposed adjustment is created.

The nominal code with the GBP base value is £1000. The stored reporting value is USD 1500.

The current exchange rate between GBP and USD is 1.75.

The Currency Revaluation calculates the following adjustment of USD 1750 – USD 1500 = USD 250.

Twinfield – Currency revaluation 

Please Note: If employees are created as suppliers (e.g. pay out expenses). Twinfield will include them in the currency revaluation and treat them as a supplier. The unrealised revaluation for both suppliers and employees is posted on the same nominal code. Revaluation of Balance sheet items and customers/suppliers are automatically reversed in the next period.