Oracle Apps Functional All About Oracle Apps functional & Technical FAQs, Tutorials

REVALUATION IN GL

§Revaluation is the process of revaluing balances that have transactions denominated in foreign currency. Revaluation reflects the change in conversion rates between the date of the transaction and the current market rate of each currency. When you run revaluation, a journal entry is created that either increases or decreases the functional currency amount for that account, based on the fluctuation of the exchange rate. The resulting gain or loss amounts are posted to Gain/Loss or Cumulative Translation Adjustment account you specify. This process creates a revaluation batch containing separate journal entries for each revalued foreign currency.

§The revaluation adjustment is created in your functional currency, this is where the fluctuation is. The foreign currency of the transaction will stay the same, it is the functional currency balance that is adjusted.

§You can revalue a single account or range of accounts, for both income statement and balance sheet reporting.

§Income Statement Accounts:

§Are revalued on the basis of the PTD or YTD balances, in accordance with the Income Statement Rule profile option.

§Balance Sheet Accounts:

§Are always revalued on the basis of their YTD balances.

§You can rerun revaluation more than once in a period. Based on the Revaluation calculation, any additional journal entries posted after the initial Revaluation journal has been posted, will be picked up in the balances that are subsequently revalued in that same period. The subsequent Revaluation journal entry will then represent the incremental change in the revalued balance, due to the additional journal entries posted after the initial Revaluation.

§GL: Revaluation Auto Query Last Run Range: You can rerun revaluation over again without having to re-enter account ranges every time you run revaluation. Set the profile option GL: Revaluation Auto Query Last Run Range to Yes. The Revalue Balances window will then reuse the account ranges you last used when you generated revaluation.

REVALUATION FORMULA –

YTD: ACCOUNT AMOUNT = ((begin_balance_dr + period_net_dr - begin_balance_cr - period_net_cr) *

revaluation_rate)) LESS

(begin_balance_dr_beq + period_net_dr_beq - begin_balance_cr_beq - period_net_cr_beq)

PTD: ACCOUNT AMOUNT = ((period_net_dr - period_net_cr) * revaluation_rate)) LESS

(period_net_dr_beq - period_net_cr_beq)

STEPS FOR RUNNING REVALUATION –

1.DEFINE REVALUATION RATE –

•Responsibility: General Ledger Super user Navigation: Setup/Currencies/Rate/Period

2.Revalue Account Balances

•Prerequisites:

__ Define an unrealized gain/loss account.

__ Define a Cumulative Translation Adjustment account in the Set of Books window.

__ Define a revaluation rate for each currency for each period for which you want to run revaluation.

§Navigation: Currency/Revaluation

3.Navigate to the Revalue Balances window.

4.Enter the accounting Period for the balances you want to revalue.

5.Enter the Unrealized Gain/Loss or Cumulative Translation Adjustment Account to record net gains and losses from the revaluation. The default is the account you entered for the previous revaluation.

6.If you choose to revalue a single currency, enter the Currency to be revalued.

7. Run revaluation.

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