Gains and Losses from Accounts Payable Transactions

If you have accounts payable vouchers for which the transaction currency is different than the company’s functional currency, gains and losses may occur when you run the Gains/Losses and Revaluations process or when you process payments in AP Payment Processing.

When You Run the Gains/Losses and Revaluations Process

When you post vouchers with a foreign transaction currency, Deltek stores the transaction amounts in all of the relevant currencies, including the transaction currency and the functional currency of the company that owns the voucher.

When you run the Gains/Losses and Revaluations process, Deltek does the following for any of those vouchers that have an unpaid balance:

1. Calculates the current value of the unpaid 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 Gains/Losses and Revaluations process (for example, the ending date of the current accounting period).
2. Compares the current value to the previous value to determine if a gain or loss exists. (The previous value is the original value plus any gains or losses calculated previously by the Gains/Losses and Revaluations process.)
3. Posts the difference between the previous value and the current value as either a credit entry to the unrealized gain account or a debit entry to the unrealized loss account. The offsetting entry is to the accounts payable account.

When You Process the Payment

When you pay vouchers that have a foreign transaction currency, Deltek does the following:

1. Calculates the current value of the unpaid balance in terms of the functional currency. To do this, Deltek uses the exchange rate in effect on the payment date entered for payment processing.
2. Compares the current value to the original value to determine if a gain or loss exists.
3. Reverses the previously posted unrealized gain or loss, if one exists.
4. Posts the difference between the original value and the current value as either a credit entry to the realized gain account or a debit entry to the realized loss account. The offsetting entry is to the cash account.