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For example, on June 30 the bank account with has balance of 23000 EURO. During month-end closing process it is revalued in the accounting currency ( which is AED Dirham) with the 4. 52 The exchange rate in effect on June 30 as having balance of is 4.52. The balance in the accounting currency is 103960 Dirham.
Revaluation of accounts in other COA sections and calculation of gains/losses are performed on per document (transaction) basis. The Notice that document amounts in the accounting currency are recorded to the GL account with all the related information. For example, for accounts in the Payable and Receivable sections of COA such information includes: Entity, Company, Contract, and Document. For accounts from other sections of COA, the related information depends on the COA section.
Gain or loss resulted from exchange rate fluctuations for a document is calculated as follows:
1. The document amount is revalued based on the exchange rate of the foreign currency with respect to the accounting currency on the date of month end.
2. Gain or loss is determined as the difference between the document amount in the accounting currency on the month-end date and the document amount on the last revaluation date that can be the transaction date if the document was posted during the current month or the previous month-end closing date if the document was posted earlier. If the difference is greater than 0, the gain is recorded; otherwise, the loss is recorded.
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