Advance Currency Module – Bank Currency Revaluation

Scenario :

How to handle bank currency revaluation? Let’s say I have an overseas bank account and I want to adjust the local currency amount according to the currency of the month so that the balance sheet bank account will be up-to-date.  

Solution: 

1. First of all, Advance Currency Module is a chargeable module. Ensure you purchase Advance Currency Module.
   In Module Manager, this module is ticked so that the function is available
2. In General Ledger> Chart of Accounts > Under Expenses
    Create an account for “UNREALISED FOREX LOSS (GL)”.  
   
   
   
3. In General Ledger > Chart of Accounts > Under Other income, create an account for “UNREALISED FOREX GAIN (GL).
   
4. Maintenance > Default Interface Accounts > Update “Unrealised forex gain GL” and “Unrealised forex loss GL”. So that system will post to these 2 accounts if the currency revaluation is proceed
   
   
   
5. Maintenance > Currencies, setup the foreign currency, we are using USD as sample.  Set a default rate, sample here is 4.0  
   
   
6.  You can now create an overseas bank account
   General Ledger > Chart of Accounts > Under Current Assets > Cash At Bank, create an overseas bank account. Example CIMB BANK (USD) > set Currency as USD, tick “Revaluation Required” (Important to tick this setting)
   
   
   
   
7.  Let’s create some transactions for Receive and Payment for this overseas bank account. For example we received USD 10,000 on 1/8/2021, the rate is 4.1  Select Bank account as CIMB Bank USD
   
   
8.  If you click on the double-entry, the system posts as local currency
   
   
9.  Continue to create another entry for payment. Create a Payment Voucher, select as CIMB BANK (USD) at 23/8/2021 > rate as 4.1 System will post local currency as well
   
   
10. Let’s say the user would like to revaluate the bank account on September,  then you need to setup the currency rate for September. Maintenance > Currencies > under Currency Rate by Periods > Click New
    Setup rate for September. Example we set 4.01 for currency rate
    
    
11.  To proceed currency revaluation, go to Advance Currency Module > Auto Revaluation – GL
    Setup the Date, and select the bank account to revaluate
    
    
    
12. Click Generate > System will generate a record after revaluation
    
    F.Currency = The oversea bank balance in the system (In Foreign Currency amount)
    Currency Rate = The currency rate
    L.Currency = Local Currency amount before currency revaluation (F.Currency X Currency Rate)
    
    Revaluate Rate = The rate we set at Currencies maintenance for September
    After Rev = Local Currency amount after currency revaluation (F.Currency X Revaluate Rate)
    Adjustment = The amount to adjust (It will post to Unrealised Gain or Loss account)
    
    * Note: Posting account based on setting in Default Interface Account
    
    
    
13. Save it then Preview this report
14. System display result as below
    
15. You can view the other report under Advance Currency > GL Multi Currency Report
    Filter the Date as you want, and choose the account for the overseas bank account
    
    
16. Preview Format SR 01 – Currency Revaluation General Ledger
    
17. Preview Format SR 03  -  Currency Revaluation General Ledger (Multi-Currency)
    
18. Go to Journal Entries > System posted currency revaluation adjustment accordingly  
19. 
    
    - End - 
    
    
    

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You might want to check out this article "Revalution" please refer https://en.wikipedia.org/wiki/Revaluation