Revaluation of AP Documents: Process Activity

The following activity will walk you through the process of performing the revaluation of open AP documents.

Story

Suppose that for reporting purposes, the accounting department of SweetLife Fruits & Jams has to revalue the open balances of vendors several times within each financial period. Acting as a SweetLife accountant, you need to revalue open AP documents and post the generated GL transactions for the 01-2024 financial period.

Configuration Overview

In the U100 dataset, the following tasks have been performed for the purposes of this activity:

  • On the Enable/Disable Features (CS100000) form, the following features have been enabled:
    • Standard Financials, which provides the standard financial functionality
    • Multibranch Support, which supports multiple branches in your instance of MYOB Acumatica
    • Multicompany Support, which supports multiple companies within one tenant.
    • Multicurrency Accounting, which enables multicurrency operations in the system
  • On the Companies (CS101500) form, the SWEETLIFE company has been defined.
  • On the Branches (CS102000) form, the HEADOFFICE branch of the SWEETLIFE company has been created.
  • On the Chart of Accounts (GL202500) form, the 20000 (Accounts Payable) and 84000 (Unrealized Gain/Loss Currency) accounts have been created.
  • On the Vendor Classes (AP201000) form, the INTLCA (Canadian Vendors) vendor class has been predefined.
  • On the Vendors (AP303000) form, the GREENTRUCK and MAPLELEAF vendors have been predefined.
  • On the Currency Rate Types (CM201000) form, the SPOT rate type has been defined.

Process Overview

In this activity, on the Currency Management Preferences (CM101000) form, you will specify the currency management settings that are needed for the revaluation. You will then run the Trial Balance Summary (GL632000) report to review the AP balance before the revaluation and review the vendors' balances on the Vendor Summary (AP401000) form. On the Revalue AP Accounts (CM504000) form, you will perform revaluation first of open AP documents in the EUR currency, and then of open AP documents in the CAD currency.

After the revaluation, you will review the unrealized gains on the AP Balance by GL Account (AP632000) form. Finally, on the Account Details (GL404000) form, you will review the revaluation batches generated by the system.

System Preparation

Before you begin performing the steps of this activity, do the following:

  1. Launch the MYOB Acumatica website with the U100 dataset preloaded, and sign in as an accountant Anna Johnson by using the johnson username and the 123 password.
  2. On the Company and Branch Selection menu on the top pane of the MYOB Acumatica screen, make sure that the SweetLife Head Office and Wholesale Center branch is selected. If it is not selected, click the Company and Branch Selection menu button to view the list of branches that you have access to, and then click SweetLife Head Office and Wholesale Center.
  3. As a prerequisite activity, make sure that the multicurrency accounting functionality has been configured as described in Multicurrency Functionality: Implementation Activity and Configuration of Rate Types and Rates: To Configure Rates.
  4. As a prerequisite activity, make sure that you have configured an account as described in Multicurrency Cash Accounts: To Configure an Account.
  5. As prerequisite activities, make sure that you have processed AP documents as described in AP Bills in Foreign Currencies: Process Activity, Debit Adjustments in Foreign Currencies: Process Activity, Multicurrency Payment of Bills: To Pay a Foreign Currency Bill by Using the Base Currency, and Multicurrency Payment of Bills: To Pay a Foreign Currency Bill by Using Another Currency.

Step 1: Specifying the Needed Currency Management Settings

To specify the needed currency management settings for revaluation, do the following:

  1. Open the Currency Management Preferences (CM101000) form.
  2. On the form, specify the following settings:
    • AP Revaluation Rate Type (Default Rate Types section): SPOT

      This setting specifies the rate type that the system will use for the revaluation of vendor balances.

    • Automatically Post to GL on Release (Posting Settings section): Selected
  3. On the form toolbar, click Save to save your changes.

Step 2: Running the Trial Balance Summary Report

To review the balance of the 20000 (Accounts Payable) account before the revaluation, do the following:

  1. Open the Trial Balance Summary (GL632000) form.
  2. On the Report Parameters tab, specify the following parameters:
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted automatically)
    • Ledger: ACTUAL
    • From Period: 01-2024
    • To Period: 01-2024
    • Suppress Zero Balances: Selected
  3. On the form toolbar, click Run Report.
  4. In the generated report, review the balance of the 20000 (Accounts Payable) account before the revaluation.

Step 3: Reviewing the Vendors' Balances Before Revaluation

To review the balances of the vendors before revaluation, do the following:

  1. Open the Vendor Summary (AP401000) form.
  2. In the Selection area, specify the following settings:
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted by default)
    • Period: 01-2024
    • Vendor Class: INTLCA - Canadian Vendors
    • Split by Currency: Selected
    • Vendors with Balance Only: Selected
  3. Review the balances of the GREENTRUCK and MAPLELEAF vendors.

    For the GREENTRUCK (Big Green Trucks Ltd.) vendor, the open balance at the end of the period is €110.00, which is $125.57 in the base currency. For the MAPLELEAF (MapleLeaf Ads Co.) vendor, the open balance at the end of the period is C$95.00, which is $74.51 in the base currency.

Step 4: Performing Revaluation of AP Documents in EUR

To perform revaluation of open AP documents in the EUR currency, do the following:

  1. Open the Revalue AP Accounts (CM504000) form.
  2. In the Selection area, specify the following settings:
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted by default)
    • Fin. Period: 01-2024
    • Currency Effective Date: 1/31/2024
    • Currency: EUR
    • Description: AP Revaluation 01-2024 EUR

    For the only listed vendor, the columns of the table provide the following information.

    • The Foreign Currency Balance column shows the outstanding balance of the vendor in the foreign currency (€110.00).
    • The Original Balance column shows the outstanding balance of the vendor in the base currency ($125.57).
    • The Currency Rate column shows the rate that will be used for revaluation—that is, the rate of the SPOT type that was effective on the date of revaluation.
    • The Revalued Balance column shows the resulting balance after revaluation: $122.67 = Round (€110.00 / 0.8967).
    • The Difference column shows the difference between the Revalued Balance and Original Balance values, which is the resulting unrealized gain (if the amount is negative) or loss (if the amount is positive). Currently, there is an unrealized gain in the amount of $2.90 ($125.57 – $122.67).
  3. In the table, select the unlabeled check box for the only row to select GREENTRUCK (Big Green Trucks Ltd.) for revaluation. The total amount of the unrealized gain or loss posted by the records selected in the table is shown in the Revaluation Total box in the Selection area of the form.
  4. On the form toolbar, click Revalue to perform the revaluation.

    The system revalues the balances of the open documents of the GREENTRUCK vendor based on the currency rate of the SPOT type effective on the date of revaluation. Then the system generates and posts the revaluation transaction, and opens it on the Journal Transactions (GL301000) form.

  5. On this form, review the transaction that was generated on revaluation in the base currency. Notice that the Auto Reversing check box in the Summary area is selected; the generated batch is auto-reversing, because revaluations are performed for reporting purposes. At the start of the next reporting period, the batch will be reversed automatically.

    When the revaluation transaction was posted, the following actions were performed in the system:

    • The AP account (20000) was debited in the amount of unrealized gain ($2.90) to revalue the account balance.
    • The Unrealized Gain/Loss Currency account specified for the EUR currency (84000), which you specified when you defined the EUR currency in Multicurrency Functionality: Implementation Activity) was credited in the amount of unrealized gain to record the revaluation.

Step 5: Performing Revaluation of AP Documents in CAD

To perform revaluation of open AP documents in the CAD currency, do the following:

  1. Open the Revalue AP Accounts (CM504000) form.
  2. In the Selection area, specify the following settings:
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted automatically)
    • Fin. Period: 01-2024
    • Currency Effective Date: 1/31/2024
    • Currency: CAD
    • Description: AP Revaluation 01-2024 CAD
  3. In the table, select the unlabeled check box for the only row to select MAPLELEAF (MapleLeaf Ads Co.) for revaluation. The revaluation will produce an unrealized gain in the amount of $0.15, which is also shown in the Revaluation Total box in the Selection area of the form.
  4. On the form toolbar, click Revalue to perform the revaluation.
  5. On the Journal Transactions (GL301000) form, which opens, review the revaluation transaction in the base currency.

Step 6: Reviewing the Unrealized Gains or Losses

To review the unrealized gains or losses for the vendor accounts and the Accounts Payable account, do the following:

  1. Open the AP Balance by GL Account (AP632000) form.
  2. On the Report Parameters tab, specify the following parameters:
    • Report Format: Vendor Summary
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted automatically)
    • Financial Period: 01-2024
    • Include Applications: Cleared
  3. On the form toolbar, click Run Report, and review the report.

    For the GREENTRUCK (Big Green Trucks Ltd.) vendor, the report shows an unrealized gain in the amount of $2.90 For the MAPLELEAF (MapleLeaf Ads Co.) vendor, the report shows an unrealized gain in the amount of $0.15. The total unrealized gain for the Accounts Payable account is $3.05 ($–2.90 + –$0.15).

Step 7: Reviewing the Revaluation Transactions

To review the revaluation transactions posted to the general ledger, do the following:

  1. Open the Account Summary (GL401000) form.
  2. In the Selection area, specify the following settings:
    • Company/Branch: HEADOFFICE - SweetLife Head Office and Wholesale Center (inserted automatically)
    • Ledger: ACTUAL
    • Period: 01-2024
    • Show Currency Details: Cleared
  3. Review the form and the balance of the Accounts Payable account.
  4. In the table, click the row with the 20000 (Accounts Payable) account, and on the form toolbar, click Account Details.
  5. On the Account Details (GL404000) form, which opens, specify 02-2024 in the To Period box.
  6. In the table, click the Module column and in the dialog box that opens, clear all the check boxes except CM to review only transactions related to currency management. Click OK.
  7. Review the entries displayed in the table.

    The table displays the revaluation batches, as well as the corresponding reversing batches, which are automatically generated at the start of the financial period after the period of revaluation. These batches offset each other, so the balance of the account becomes the same as it was before the revaluation.