Adjust Exchange Rates – NAVISION, BC 365
As per accounting standard, we need to present the balance sheet
in their true and fair value with considering the other accounting concepts;
Adjust exchange rate function helps us to do the same considering the different
currencies.
In multinational companies, the transactions take effects in
many currencies, as well as the currencies, need to be evaluated as per their
closing averages (Currency exchange rate) of the year and accordingly the Unrealized
FX Gains/loss need to reflect in the balance sheet.
Adjust Exchange rate, a function available in business central
and prior versions of dynamic Navision. BC 365 through that all the
transactions related to Vendor, Customer, and Bank can be revaluating with the
effective exchange rate.
Now, suppose on 31-Dec-2018 you have received a payment from a customer of 10,000 USD and in currency setup, the below exchange rates were set up. So, actually in AED system record the amount by AED 36780 (10000 *
3.678), means the system considers “Relational Exch. Rate Amount’’ while recording
the transactions, whereas to do the Adjustment in the recorded/posted
transactions system use the exchange rate available in “Relational Adjmt Exch.
Rate Amt”.
Now, In this case, if we run the Adjust Exchange Rates function, the system creates the
unrealized loss entry by AED 320 (10,000 * (3.71 – 3.678))
I hope, it gives insight knowledge and user can link the
accounting concept with Business Central 365.
Contact Triknow for more information. Microsoft Partner BC 365
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