Dynamics 365 Finance
Category
Mar 20, 2024
Published date
Text
Article Type
AI Summary
- The article discusses the importance of multi-currency transactions in organizations with business spanning across multiple countries and how Dynamics 365 Finance & Operations facilitates currency conversions.
- Dynamics 365 Finance & Operations offers a functionality called Foreign Currency Revaluation, which allows users to calculate unrealized foreign currency gain/loss against open transactions, account the gain/loss into the respective GL accounts, and transfer the balance to realized gain/loss accounts at the time of settlements.
- The setup process for Foreign Currency Revaluation involves configuring currency exchange rates, setting up main accounts for unrealized and realized gain/loss, linking the main accounts to the ledger, and enabling multi-currency option in bank master.
- The process flow for Foreign Currency Revaluation involves creating backdated FTI journals, running the Foreign Currency Revaluation process for a specific vendor/customer, and posting the currency difference amounts to the relevant accounts.
- The article provides an example scenario where there is a net gain for customer payments, and explains the accounting impacts and voucher effects associated with the process.
- The article also mentions that similar accounting impacts occur for vendor gain, vendor loss, and customer loss scenarios.
- The article highlights that running Foreign Currency Revaluation helps determine the best time span for making payments in order to benefit from currency exchange rates.
- If payments are made without running Foreign Currency Revaluation, the system directly impacts the realized gain/loss account for the currency variation amount against the vendor/customer, without accounting for unrealized gain/loss.
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