Gains and Losses and Cash-basis Accounting
If you use cash-basis accounting, you can set up individual foreign-denominated accounts so that the Gains/Losses and Revaluations process updates their cash-basis balances.
In most cases, companies consider gains and losses from the revaluation of foreign-denominated accounts as unrealized gains and losses, so those gains and losses do not affect cash-basis account balances. However, if you want Deltek to post cash-basis entries for revaluation gains and losses for a foreign-denominated account, you have that option. To do that, select Update Cash Basis during Revaluation for that account in .
If you have a foreign-denominated general ledger account for which Update Cash Basis during Revaluation is selected, the following occurs when you run the Gains/Losses and Revaluations process:
- Deltek calculates the account balance in terms of the functional currency. To do this, Deltek uses the exchange rate in effect on the date you specify when you run the process.
- Deltek compares the current balance in the functional currency to the previous balance.
- If the balance in the functional currency has changed,
Deltek posts an entry for the difference as follows:
- For a gain, Deltek posts to the revaluation gains account for the foreign-denominated account, if you specified one in . If you did not specify a revaluation gains account for the foreign-denominated account, Deltek posts to the realized gains account in the Accounting Company Settings form.
- For a loss, Deltek posts to the revaluation losses account for the foreign-denominated account, if you specified one in . If you did not specify a revaluation losses account for the foreign-denominated account, Deltek posts to the realized losses account in the Accounting Company Settings form.
The Gains/Losses and Revaluations Detail report does not include these cash-basis entries for revaluation gains and losses for foreign-denominated accounts.