Gains and Losses from Revaluation of Foreign-Denominated General Ledger Accounts

Foreign-denominated accounts have a currency other than your company's functional currency. The revaluation process may result in gains and losses for foreign-denominated accounts.

The balance of foreign-denominated accounts as expressed in your company’s functional currency fluctuates as the exchange rate changes. Vision calculates the gains or losses for these accounts when you run the Gains/Losses and Revaluations process.

In the Chart of Accounts Info Center, you can also specify gains and losses accounts for individual foreign-denominated accounts. If you do, Vision posts any gains or losses that result from the Gains/Losses and Revaluations process to those accounts rather than to the default unrealized gains and losses accounts in the Accounting Company Settings form. You can override the default accounts for individual foreign-denominated accounts if that is necessary because of the generally accepted accounting practices under which you operate. If you do not specify an override gain or loss account for a foreign-denominated account, Vision uses the default unrealized gains and losses accounts specified in the Accounting Company Settings form.

If you use cash-basis accounting, you have the option to have Vision post cash-basis entries when the Gains/Losses and Revaluations process revalues the foreign-denominated account balance.

When You Run the Gains/Losses and Revaluations Process

If you have general ledger accounts for which you have specified a currency other than the company’s functional currency, the following occurs when you run the Gains/Losses and Revaluations process:

1. Vision calculates the account balance in the functional currency, based on the current balance in the account’s designated currency. To do this, Vision uses the exchange rate in effect on the date you specify when you run the process.
2. Vision compares the current balance in the functional currency to the previous balance in that currency.
3. If the balance in the functional currency has changed due to a change in the exchange rate, Vision posts an entry for the difference to an unrealized gains account or to an unrealized losses account.