Revaluation in R12 -

Question

Hi,
I got acquainted with the documentation describing the principle of the revaluation program and see that the standard mechanism in Polish Localization did not satisfy our Client needs.
Calculation is not correct according to the Luxembourg accounting rules, because at the time of the positive and negative exchange rate differences on one account claims or liabilities arising from different transactions, the system will show the differences in balance, and reference them into account currency fluctuations.
According to the Luxembourg rules should be calculated from the difference in the currency of each transaction entered in the assets and liabilities, and only negative differences should be taken into account in the income statement.
Please help me solve the problem, maybe other localizations meets these requirements?
I put the SR on Metalink and I got the answer: "Add-On localizations team confirmed they do not have functionality for this. Also in standard Belgium Localizations (JE) there is no such functionality. So I think you will need to look into customization."
Of course if no one has met with such a requirements I will prepare customization...
Magdalena

Answer 1

Hi
Funding revaluation is adjusting the funding allocated to the project in Functional Currency.
The revaluated funding amount should equal the following components:
The receipts applied to the project invoices as they were converted on the receipt date to the functional currency (Including any realized exchange rate gain or loss) +
Future receipts from unpaid invoices and agreement backlog converted to functional currency using the revaluation date exchange rate.
The difference between newly revaluated funding amount and previous value of total funding in functional currency is the additional amount allocated to the project as a funding line.
In the example of the user guide, original funding amount was 1,000,000 GBP, which equal 1,550,000 USD.
During first period invoice billed for 300,000 GBP.
You received 200000 GBP which were converted to 308,000 USD.
That AR transaction was recorded as - Cash applied 310,000 USD (200,000 GBP at 1.55) + Exchange rate gain/loss -2000 USD.
At end of period the due invoices were 100,000 GBP, and backlog (unbilled) was 700,000 GBP. Those 800,000 GBP should be revalued using the exchange rate of 1.58.
That brings us to 1,264,000 USD.
The total amount of revaluated funding should be = 308,000 + 1,264,000 = 1,572,000 USD.
The revaluated funding is higher than previous original funding by 22,000 USD (=1572000-1550000).
Therefore, system will create a revaluation funding line with 22,000 USD allocated to the project.
Dina