If an account is selected to be revalued in Oracle General Ledger, only rows in the GL_BALANCES table with TRANSLATED_FLAG = R, are candidates for revaluation, i.e. foreign entered amounts. Below is the formula:
The result of this calculation will be the amount of the journal entry for this account. Each foreign entered currency for an account would have a separate journal entry.
Assume the Functional Currency is USD, and GBP would be an entered foreign currency. The GL_BALANCES table for code_combination_id (ccid) 123, an asset account, looks like this for the month, JAN-02.
The following columns will be used in the examples:
Period_Net_DR = Per DR Period_Net_CR = Per CR Begin_Balance_DR = Beg DR Begin_Balance_CR = Beg CR Period_Net_DR_Beq = PDR Beq Period_Net_CR_Beq = PCR Beq Begin_Balance_DR_Beq = BDR Beq Begin_Balance_CR_Beq = BCR Beq Code_Combination_ID = CCID Currency_Code = Curr Code Translated_Flag = Trans Flag
(Details of the entries affecting the balances for CCID 123 are shown for clarification.)
JAN-02 Curr Trans Per Per Beg Beg PDR PCR BDR BCR CCID Code Flag DR CR DR CR Beq Beq Beq Beq
The journal entry for this account would be in GBP, the entered foreign amount would be ZERO and the accounted amount would be 15. After this entry is posted, the balances would look like this:
JAN-02 Curr Trans Per Per Beg Beg PDR PCR BDR BCR CCID Code Flag DR CR DR CR Beq Beq Beq Beq
Bbal 123 GBP R JE2 100 160 Reval 0 15 Ebal 123 GBP R 100 175
Example 2: During FEB-02 the revaluation entry is reversed, a few more entries are posted and revaluation is run again. The revaluation rate for FEB-02 is 1.80.
The balances before the revaluation journal:
FEB-02 Curr Trans Per Per Beg Beg PDR PCR BDR BCR CCID Code Flag DR CR DR CR Beq Beq Beq Beq
At the end of the month there are 150 GBPs in the account revalued at 1.8, or 270 USD (110 +175 -15). The total USD balance is (5515 + 225 - 3200 -300) = 2240.
Example 3: What happens in example 2, if the revaluation reversal entry is deleted and a manual reversal entry is created to replace it?
Balances before revaluation:
FEB-02 Curr Trans Per Per Beg Beg PDR PCR BDR BCR CCID Code Flag DR CR DR CR Beq Beq Beq Beq
At the end of the month there are 150 GBPs in the account revalued at 1.8, or 270 USD (95 + 175). The total USD balance is (555 + 210 - 3200 - 300) = 2225.
The results at the end of the month are different using the manual reversal. The problem being the manual reveral (MR_Reval) is entered in USD and the 15 is not reversed out of the BEQ column, this causes the revaluation amount to be calculated 15 lower than expected. (It is not possible to enter a manual entry that replicates the entry created by the program for the reversal.)
Example 4: What happens in example 2, if the revaluation entry is not reversed?
Balances before Revaluation:
FEB-02 Curr Trans Per Per Beg Beg PDR PCR BDR BCR CCID Code Flag DR CR DR CR Beq Beq Beq Beq
At the end of the month there are 150 GBPs in the account revalued at 1.8, or 270 USD (95 +175). The total USD balance is (5515 + 210 - 3200 - 285) = 2240. This is the same result as in example 2.
The decision to reverse the entry or not, depends on business preferences. If you want the revaluation journal to reflect the difference between the current rate and the rate of the date of the original transactions, then reverse the revaluation journal. If you prefer the revaluation journal to reflect the difference between the current rate and the rate used the last time you revalued, do not reverse the revaluation journal in the next period. Some clients revalue more than once during a period (additional entries or rate correction), so they do not reverse the revaluation journal (in the current period) in order to see the incremental effect sine the last revaluation run.
Bill Szakovits Oracle General Ledger Support Orlando, Florida