Translation: It is used to translate functional currency balances into foreign currency balances at the account level
Revaluation: It is used identify the unrealized gain or loss .which is occurring on the currency fluctuation.
Example:
On 01-Dec-2009
-Functional Currency is USD
-Foreign Currency is INR.
-Conversion Rate is 2.
-Created invoice for 100 INR, validated and accounted. Not Paid.
As per the above journal lines on 01-Dec-2009, customer is liable to pay 200 USD to the supplier.
-End of the period, conversion rate has been changed to 2.5.
-So customer's liability will get increased to 250 USD(100*2.5).
-So customer suppose to pay 250 USD instead of 200 USD to the supplier.
-This is the true liability at the end of the period and this need to be reflected in customer's General Ledger. Loss 50 USD should be populated in Loss account.
-Revaluation adjusts these amounts and keeps gain/loss amounts in Unrealized Gain/Loss accounts defined in Revaluation window.
Revaluation: It is used identify the unrealized gain or loss .which is occurring on the currency fluctuation.
Example:
On 01-Dec-2009
-Functional Currency is USD
-Foreign Currency is INR.
-Conversion Rate is 2.
-Created invoice for 100 INR, validated and accounted. Not Paid.
As per the above journal lines on 01-Dec-2009, customer is liable to pay 200 USD to the supplier.
-End of the period, conversion rate has been changed to 2.5.
-So customer's liability will get increased to 250 USD(100*2.5).
-So customer suppose to pay 250 USD instead of 200 USD to the supplier.
-This is the true liability at the end of the period and this need to be reflected in customer's General Ledger. Loss 50 USD should be populated in Loss account.
-Revaluation adjusts these amounts and keeps gain/loss amounts in Unrealized Gain/Loss accounts defined in Revaluation window.
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