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Currency Revaluation on Bank Transactions

We recently had a client that was transferring funds into a Bank account in one specific currency (EUR), and then would transfer the money out at a later date, using a different currency (USD.)
The issue here is that each transaction has different Currency Exchange rate on each transaction, meaning, that both transactions will generate a balance difference in the bank account.

 

They required AX to account for the exchange rate difference between these transactions. As this was not an AR, or AP sub-ledger transaction, Microsoft Dynamics AX 2012 would not automatically update the funds in the Unrealized gain/loss account.

To record this information correctly, users must follow the next steps:

1. Update the Main Account marking the “Foreign Currency Revaluation” checkbox.

2. Verify if the Realized, and Unrealized gain/loss accounts in the Ledger form (General Ledger/Setup/Ledger) are configured correctly

3. Go to General Ledger/Periodic/Foreign Currency Revaluation and run the process for the desired accounts. Make sure you select a date range, as well as the account type being revaluated (Balance Sheet, or Profit and Loss)

4. After the transactions are posted, the trial balance for the Unrealized Gain/Loss will show the following information

5. In the bank account involved, the balance will be updated taking into account the exchange rate difference as seen below

About the authors

Carolina Anzola is a System Engineer and Microsoft Dynamics AX/365 for Enterprise Senior Consultant at Pangea Group. Carolina is passionate about helping clients reach their operational goals and has over 10 years of experience working with clients in numerous industries, including telecommunications, technology, financial services, public sector and entertainment

David Diab is a Microsoft Dynamics AX/365 for Enterprise consultant at Pangea Group, a CRM and ERP solutions provider that helps understand, adapt, and improve customer business processes. Previously, David worked as an Information Technology specialist at Minnesota State University, Mankato; University from which he graduated with Magna Cum Laude honors with a Business Management Degree.

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