Hi David,

Multicurrency revaluation is something one does at the month/period/year end 
for financial statements. For example you have multicurrency transactions and 
you have to reflect the true value at the end of month in functional(base or 
local) currency. One revalues the accounts i.e. balance sheet accounts at the 
month end exchange rate and profit & loss accounts at the average exchange rate 
for the month or period (depends on what duration one runs the revaluation.

For example:
Your base currency is Pound Sterling in GB.
1st March: You purchase 100 USD from a foreign supplier (div exch rate 1.5 = 
66.66 Pounds) (assuming invoice is not settled and it is in account payables)
3rd March: You purchase 100 USD from a foreign supplier (div exch rate 1.6 = 
62.50 Pounds) (assuming invoice is not settled and it is in account payables)
31st March: Month End (exch rate 1.4)

at the end of March your foreign currency balance in account payables 
i.e.liability would be 200 US Dollars.However the Pound Sterling value would be 
66.66+62.50 = 129.16. Since it is balance sheet item and one have to revalue at 
the month end rate, the revaluation process will adjust Pound value from 129.16 
to (200/1.4=) 142.85. So the account payables in the balance sheet would be 
142.85. The difference of 142.85 and 129.16 would be posted to gains/losses 
account accordingly. 


Some material on revaluation on page 47 of 
http://mbs.microsoft.com/downloads/public/GP10Docs/MulticurrencyManagement.pdf

However currency translation is slightly different and only used for reporting 
in presentation currency. For example your parent company is in Japan. Than you 
will simply translate the value based on exchange rate (Balance sheet @ cut off 
date, Profit & Loss @ average rate for the period)


Hope this helps

Regards,
Dhariwal




-------------------- m2f --------------------

--
http://www.openobject.com/forum/viewtopic.php?p=36537#36537

-------------------- m2f --------------------


_______________________________________________
Tinyerp-users mailing list
http://tiny.be/mailman/listinfo/tinyerp-users

Reply via email to