Revaluation of AR Documents: Process Activity

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

Story

Suppose that for reporting purposes, the accounting department of SweetLife Fruits & Jams has to revalue the open balances of customers several times within each financial period. Acting as a SweetLife accountant, you need to revalue open AR 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 11500 (AR Provisioning), 11000 (Accounts Receivable), and 84000 (Unrealized Gain/Loss Currency) accounts have been created.
  • On the Customers (AR303000) form, the EASYDINER and MINTSTORE customers 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 currency management settings that are needed for the revaluation, and on the Currencies (CM202000) form, you will specify the AR Provisioning account for CAD. You will then run the Trial Balance Summary (GL632000) report to review the Accounts Receivable balance before the revaluation. On the Revalue AR Accounts (CM505000) form, you will perform revaluation first of open AR documents in the EUR currency, and then of open AR documents in the CAD currency.

After the revaluation, you will review the balance of the Accounts Receivable and AR Provisioning accounts on the Account Summary(GL401000) form, and then review revaluation batches on the Account Details (GL404000) form.

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 AR documents as described in AR Invoices in Foreign Currencies: Process Activity, Credit Memos in Foreign Currencies: Process Activity, Multicurrency Payment of Invoices: To Pay a Foreign Currency Invoice by Using the Base Currency, and Multicurrency Payment of Invoices: To Pay a Foreign Currency Invoice by Using Another Currency.

Step 1: Specifying the Settings Needed for the Revaluation

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

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

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

    • Automatically Post to GL on Release (Posting Settings section): Selected
  3. On the form toolbar, click Save to save your changes.
  4. Open the Currencies (CM202000) form.
  5. In the Currency ID box, select CAD. You defined this currency in the system in Multicurrency Functionality: Implementation Activity.
  6. In the AR Provisioning Account box on the GL Accounts tab, select 11500 (AR Provisioning).
  7. On the form toolbar, click Save to save your changes.

Step 2: Running the Trial Balance Summary Report

To review the balance of the 11000 (Accounts Receivable) 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 11000 (Accounts Receivable) account before the revaluation.

Step 3: Performing Revaluation of AR Documents in EUR

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

  1. Open the Revalue AR Accounts (CM505000) 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: AR Revaluation 01-2024 EUR

    The table in the bottom part of the form shows for which customer and which account there are open balances in the specified currency at the end of the selected period.

  3. In the table, select the unlabeled check box for the only row to select EASYDINER (EasyDiner Co.) for revaluation. The total amount of unrealized 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 EASYDINER customer 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 automatically posted, the following actions were performed in the system:

    • The AR account (11000) was credited in the amount of unrealized loss ($0.82) 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 debited in the amount of the unrealized loss to record the revaluation.

Step 4: Performing Revaluation of AR Documents in CAD

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

  1. Open the Revalue AR Accounts (CM505000) 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: 1/29/2024
    • Currency: CAD
    • Description: AR Revaluation 01-2024 CAD

    For the only listed customer, the columns of the table provide the following information:

    • The Foreign Currency Balance column shows the outstanding balance of the customer in the foreign currency (C$200).
    • The Original Balance column shows the outstanding balance of the customer in the base currency ($156.54)
    • The Currency Rate column shows the rate that will be used for revaluation (1.275200)
    • The Revalued Balance column shows the resulting balance after revaluation ($156.84 = Round (C$200 / 1.275200)).
    • The Difference column shows the difference between the Revalued Balance and Original Balance, which is the resulting unrealized gain (if the amount is positive) or loss (if the amount is negative). Currently, there is an unrealized gain in the amount of $0.30 ($156.84 – $156.54).
  3. In the table, select the unlabeled check box for the only row to select the 11000 AR account for revaluation. The total amount of the unrealized gain posted by the record 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 of the selected account.

    The system revalues the balances of the open documents of the MINTSTORE customer based on the currency rate of the SPOT type that was effective on the date of revaluation. Then the system generates the revaluation transaction and opens it on the Journal Transactions (GL301000) form.

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

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

    • The AR Provisioning account specified for the currency of revaluation (11500) was debited in the amount of the unrealized gain ($0.30).
    • The Unrealized Gain/Loss Currency account (84000), which you specified when you defined the CAD currency in Multicurrency Functionality: Implementation Activity) was credited in the amount of the unrealized gain ($0.30).

Step 5: Reviewing the Accounts Receivable and AR Provisioning Balances After the Revaluation

To review the balances of the Accounts Receivable and AR Provisioning accounts after the revaluation, 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. In the table, review the ending balance of the 11000 (Accounts Receivable) account.

    The AR balance is $15,994.55, because the EUR revaluation resulted in a realized gain and was recorded to the Accounts Receivable account. The result of the CAD revaluation was a realized gain ($0.30) and was recorded to the 11500 (AR Provisioning) account.

  4. In the table, click the row with the 11500 (AR Provisioning) 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, and review the entries displayed in the table.

    The table displays the revaluation batch, as well as the corresponding reversing batch, which is 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 $0.00, as it was before the revaluation.