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Foreign-Currency Revaluation

Foreign-currency balances are booked at the rate on the day they were posted. At a period end the rate has moved, so an unpaid euro invoice or a dollar bank account is worth a different amount in the company's own currency. FX revaluation restates those balances at the closing rate, posts the unrealised gain or loss, and reverses it the next day so the following period starts clean.

Where to find it

Admin Panel → Finance:

  • Ledger & Finance — the FX revaluation tab (preview and post), and the Set-up tab (exchange rates)

Architect Panel → ERP - Finance:

  • Exchange Rates — the rates as a datastore

Before you start

  • An account must carry the role Unrealised exchange gains and losses on the chart. Without it the preview works but nothing can be posted; the tab says so. The UK template sets it.
  • A closing rate for each currency at the period end should be on the Set-up tab under Exchange rates. The revaluation falls back to the spot rate when there is no closing rate.
  • Both the revaluation date and the reversal date need an open period.

Running a revaluation

  1. Choose the company and set As at at the top to the period end, for example 30 September.
  2. Open FX revaluation. Choose the Rate: Closing (falls back to spot), Spot or Average.
  3. Under Revalue, tick what to include: Receivables, Payables, Bank and Intercompany. Bank means accounts kept in another currency only.
  4. Leave Reverse on (optional) blank for the next day, or set a date.
  5. Press Preview. Each balance is listed with its account, kind, currency, foreign balance, the value it was booked at, the rate, the revalued amount and the difference, with the net unrealised gain or loss.
  6. Press Post revaluation… and confirm. One journal of type FXR posts on the as-at date, and its reversal on the reverse-on date.

What it does and does not touch

  • A company can be revalued once per date. Run the preview again afterwards and it says Already revalued, with links to the journal and its reversal.
  • A realised difference, when a foreign invoice is actually settled, is not part of this. It is posted when the payment is allocated, to the account with the Realised exchange gains and losses role.
  • Bank reconciliation leaves revaluation journals out of a foreign-currency account's proof: they change the sterling value, not the foreign cash.
  • The cash-flow statement shows revaluation of cash accounts as the effect of exchange rate changes on cash.

The close check

The month-end close board checks Foreign-currency balances revalued at the period end. It fails, and blocks the close, while a company with foreign balances has not been revalued at that period end. A company with no balance in another currency shows it as not applicable.

What goes wrong

  • "No account has the role Unrealised exchange gains and losses": give one the role on the Chart of accounts tab.
  • "Nothing to revalue": no open foreign balance differs from its booked value at that date.
  • Posting refused: the as-at or reversal date falls in a closed period.

Worked example

A sterling company has an open euro invoice of 10,000.00 booked at 0.86 (8,600.00) and a euro bank account. At 30 September the closing rate is 0.85. The preview shows the invoice revalued to 8,500.00, a difference of -100.00, and the bank account's change. The controller posts the revaluation; it reverses on 1 October, and when the customer pays in October the realised difference is posted with the allocation.

Recommendations

  • Load closing rates before revaluing, using Paste rates… on the Set-up tab.
  • Revalue every month end, before closing the period.
  • Use Closing as the rate unless your accounting policy says otherwise.
  • Leave the reversal on the default date so each period starts from booked values.