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Revaluation Document Version: 2.0 Date: Jan 2003 Authors: Debra Vandegrift and Niall McColl

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Table of Contents

Overview……………………………………………………………………………….2 Revaluation Formula………………………………………………………………….3 Define Revaluation Rate………………………………………………………………4 Revalue Account Balances……………………………………………………………4 Reports…………………………………………………………………………………8 Profile Options………………………………………………………………………...9 Patches…………………………………………………………………………………10

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Revaluation is the process of revaluing balances that have transactions denominated in foreign currency. Revaluation reflects the change in conversion rates between the date of the transaction and the current market rate of each currency. When you run revaluation, a journal entry is created that either increases or decreases the functional currency amount for that account, based on the fluctuation of the exchange rate. The resulting gain or loss amounts are posted to Gain/Loss or Cumulative Translation Adjustment account you specify. This process creates a revaluation batch containing separate journal entries for each revalued foreign currency. The revaluation adjustment is created in your functional currency, this is where the fluctuation is. The foreign currency of the transaction will stay the same, it is the functional currency balance that is adjusted. When you look at the revaluation entry on the Enter Journals form, you should see Entered Debits/Credits equal to zero. The Converted Debits/Credits should be the revaluation adjustment, you should see an amount here. You can revalue a single account or range of accounts, for both income statement and balance sheet reporting. Income Statement Accounts: Are revalued on the basis of the PTD or YTD balances, in accordance with the Income Statement Rule profile option. (See profile options, page 9 ) Balance Sheet Accounts: Are always revalued on the basis of their YTD balances. When you reverse the revaluation entry, General Ledger defaults the reversal periodto the next period. You can change the reversal period by choosing More Actionsfrom the Enter Journals form. Choose the period you want to reverse the revaluation in.

You can rerun revaluation more than once in a period. Based on the Revaluation calculation, any additional journal entries posted after the initial Revaluation journal has been posted, will be picked up in the balances that are subsequently revalued in that same period. The subsequent Revaluation journal entry will then represent the incremental change in the revalued balance, due to the additional journal entries posted after the initial Revaluation. You can rerun revaluation over again without having to re-enter account ranges every time you run revaluation. Set the profile option GL: Revaluation AutoQuery Last Run

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Range to Yes (See Profile Options, page 9 ). The Revalue Balances window will then reuse the account ranges you last used when you generated revaluation.* Revaluation Formulas YTD: ACCOUNT AMOUNT =

((begin_balance_dr + period_net_dr - begin_balance_cr - period_net_cr) * revaluation_rate)) LESS

(begin_balance_dr_beq + period_net_dr_beq - begin_balance_cr_beq - period_net_cr_beq) PTD: ACCOUNT AMOUNT =

((period_net_dr - period_net_cr) * revaluation_rate)) LESS (period_net_dr_beq - period_net_cr_beq)

Income Statement Accounts: Are revalued on the basis of the PTD or YTD balances, in accordance with the Income Statement Rule profile option. (See profile options, page 9 ) Balance Sheet Accounts: Are always revalued on the basis of their YTD balances.

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Define Revaluation Rate

Responsibility: General Ledger Superuser Navigation: Setup/Currencies/Rate/Period Form Name: GLXRTPER Revalue Account Balances Prerequisites: �� Define an unrealized gain/loss account. �� Define a Cumulative Translation Adjustment account in the Set of Books window. �� Define a revaluation rate for each currency for each period for which you want to run

revaluation.

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Responsibility: General Ledger Superuser Navigation: Currency/Revaluation Form Name: GLXFCRVL (This form is updated in Release 11.5.9 - See Appendix A) 1. Navigate to the Revalue Balances window. Note: As you complete the remaining steps, note that the Revalue Balances window may display various warning messages, depending on the selections you make, especially if either the currency you are revaluing or your functional currency has a currency derivation of Euro, EMU, or Interim EMU. If you receive a warning, review your entries carefully to make sure they are correct. 2. Enter the accounting Period for the balances you want to revalue. 3. If you have average balance processing enabled, enter an Effective Date for the revaluation journal entries that General Ledger will create. If you do not enter an effective date, General Ledger will use the nearest business day in the Period you chose. Additional Information: If you enter an invalid effective date, based on the Effective Date Rules you’ve defined for your Revaluation journal source, General Ledger will automatically adjust the effective date to one that is valid.

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4. Enter the Unrealized Gain/Loss or Cumulative Translation Adjustment Account to record net gains and losses from the revaluation. The default is the account you entered for the previous revaluation. 5. Choose one of the following Currency Options:

Single Currency: to revalue a particular foreign currency. EURO+EMU: to revalue all currencies whose currency derivation is EURO, EMU, and Interim EMU. All Currencies: to revalue all foreign currencies.

6. If you choose to revalue a single currency, enter the Currency to be revalued. If your set of book’s functional currency has a currency derivation of Other, you can only enter a currency that also has a currency derivation of Other. If you choose to revalue all currencies, General Ledger revalues each foreign currency balance only if a period-end rate exists for each currency and accounting period. Note: You must define a period-end rate for your selected accounting period and currency before running revaluation. 7. If you choose to revalue a single currency, you may need to enter the Rate to use for the revaluation, depending on whether your set of book’s functional currency has a currency derivation of Other, EURO, EMU, or Interim EMU:

Other: If the functional currency derivation is Other, General Ledger automatically displays the period– end rate defined for this accounting period and currency. You can use this default rate, or enter a different Rate (in the window). Euro, EMU, or Interim EMU: If the functional currency derivation is Euro, EMU, or Interim EMU, General Ledger automatically displays a fixed rate or a period– end rate, depending on the currency derivation of the currency you choose to revalue: �� Euro, EMU, or Interim EMU: General Ledger displays the fixed conversion

rate. You cannot change this rate. �� Other: General Ledger displays the period– end rate for the period and currency. You

can use this default rate, or enter a different Rate (in the window). 8. If the GL: Revaluation AutoQuery Last Run Range profile option is set to Yes, the Revalue Ranges region of the window automatically displays the GL account number ranges last entered. You can use these existing account numbers and proceed with the revaluation, or you can delete the record (Edit>Delete Record) and enter a new account number range or ranges.

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If the profile option is set to No, the Revaluation Ranges region displays blank account number fields. Enter a low account number (Account Low) and a high account number (Account High) to define a range of account numbers to be revalued. Repeat this step to enter multiple ranges.

Note: You can select balance sheet and income statement accounts. Balance sheet accounts are revalued in accordance with their year– to– date balances. Income statement accounts are revalued using either their period– to– date or year– to– date balances, as defined by profile option GL: Income Statement Accounts Revaluation Rule. (See Profile Options, page ).

9. Choose Revalue. General Ledger launches a concurrent process to revalue your account balances. The process names your revaluation batch in the following format: Revalue <Period Name> <Concurrent Request Date> <Concurrent Request Time>; for example, Revalue JAN– 95 31– JAN– 95 15:34:00. The following table summarizes the revaluation journal entries generated by the Revalue Button: Account Type

Journal Line Primary

Journal Line Offset

Asset Target Asset Account Selected Gain/Loss Account Liability Target Liability Account Selected Gain/Loss Account Revenue Target Revenue Account Cumulative Translation Adjustment Account Expense Target Expense Account Cumulative Translation Adjustment Account 10. Use the Revaluation Execution Report to review the status of your account revaluation. General Ledger automatically generates this report when you run revaluation. 11. Post the revaluation journal batch.

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Reports Revaluation Execution Report Review the details of your account balance revaluation and the journal batches created after running revaluation. The report includes the currencies and revaluation rates used to revalue your accounts, the unrealized gain/loss account in which you recorded net gains and losses, and the range of accounts revalued. The report also prints the names of batch and journals General Ledger creates for each foreign currency when you revalue your accounts, as well as the total debits and credits of the created batch. General Ledger automatically generates this report when you run revaluation.

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Profile Options GL: Income Statement Accounts Revaluation Rule (11.0.3, GL Patchset E 1178837) Use this profile option to select either period-to-date (PTD) or year-to-date (YTD) income statement account balances for revaluation. The following values are available: PTD: Only PTD balances will be revalued for income statement accounts. YTD: Only YTD balances will be revalued for income statement accounts. The default for this profile option is YTD. You can only review this profile option at the user level. Your System Administrator can set this profile option at the site, application, or responsibility level. GL: Revaluation: Autoquery Last Run Ranges (11.0.3, GL Patchset E 1178837) This profile option allows the Revalue Balances window to retain the GL account number ranges last entered. Re-populating the window account number ranges each time it is opened (the user does not have to re-enter), The following values are available to you:

Yes: The Revalue Balances window automatically re-populates the revaluation account number ranges with the account ranges last used, each time you open the window. No: The Revalue Balances window displays blank account number fields each time you open the window. The default for this profile option is No.

You can only review this profile option at the user level. Your System Administrator can set this profile option at the site, application, or responsibility level.

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Patches 1405422 Revaluation errors out with signal 11 with large number of currencies. (11.0) Problem: Revaluation errors out with signal 11 when running across large number of currencies due to insufficient memory allocation. Solution: Now it works fine. Pre-requisite patches: 905431 1339877 security Rules do not allow change of default Revaluation account (11.0 and 11.5) In the Revaluation form, the Unrealized Gain/Loss Account was being defaulted to the last value entered. In case a responsibility had a security rules not allowing it to access the defaulted value, the user would get stuck in the flexfield pop-up window as he would not have permissions to change the defaulted value. The logic has been fixed to eliminate this problem. Now the account information is defaulted only if no security rules are violated. 967064 The Revaluation program creates journals that do not have creation date or created by information. (11.0) Problem: The Revaluation program creates journals that do not have creation date or created by information. Solution: Now it provides this information. GL Patchset E 1178837 (11.0.3) Profile options GL: Income statement Accounts Revaluation Rule GL: Revaluation Autoquery Last Run Rule 2532538 Enhancements to the Revaluation Program Revaluation has been enhanced to save revaluation options for reuse, to use daily rates if desired, to submit revaluations through standard report submission, and many other enhancements

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APPENDIX A: Enhanced Revaluation functionality Release 11.5.9 (and 11i Family Pack D, 11i.GL.H and standalone patch 2532538) enhances revaluation functionality in the following ways:

• You can now define multiple Revaluations, and save them individually for re-use. This means you can define different revaluation criteria for different account types, and re-use the definitions without having to re-enter the criteria.

• You can automatically post the resulting journals.

• You can submit previously saved revaluations from the Submit Requests form.

• You can group revaluations into request sets, and schedule them for automatic and periodic submission

• You can apply function security to the Revaluation form, to prevent users running the Revaluation program from the Revaluation form.

• You can revalue using Daily Rates, or one-time rates, in addition to period-end rates.

• Your revaluation ranges can include parents in the balancing and account segments, and the application will automatically include the related children in the revaluation, if the same parent is specified for the low and high accounts.

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Revised Revaluation form

Responsibility: General Ledger Superuser Navigation: Currency/Revaluation Form Name: GLXFCRVL

To define a new Revaluation, enter information in the various fields, and save the record. Alternatively, clicking the Revalue button saves the record. To amend an existing revaluation, query it back in this form, make the necessary changes, then save the record. To delete an existing revaluation, query it back in this form, and choose View/Delete from the menu, then save your changes. If you want your Revaluation journals to AutoPost, check the AutoPost Revaluation checkbox. If this is not checked, post the journals manually once the process is complete

1. Choose one of the following currency options:

All currencies – all currencies that have an appropriate rate defined will be revalued

Single currency – only the selected currency will be revalued, and only if an appropriate rate exists

2. Choose one of the following rate options:

Period Rates – Revaluation uses period-end rates to revalue the balances. Define your period rates on the Period Rates form (Setup/Currencies/Rates/Period).

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Daily Rates – if you choose this option, you need to choose the rate type. You can choose any defined rate type except EMU-Fixed and User.

One-time – Revaluation uses the specified rate to revalue all balances. You have to specify the rate to use. This option is only available when you revalue a single currency.

3. Enter the unrealized gain and loss account. You can use the same account for both gains and losses. The company segment is not required – this is inserted dynamically by the revaluation program. If the profile option GL Revaluation: Tracking by Cost Center is enabled, the cost center is not required. Debit revaluation adjustments are offset against the Unrealized Gain account. Credit revaluation adjustments are offset against the Unrealized Loss account. If the same account is specified for both gains and losses, the net is debited/credited to the account

4. Enter the range of accounts you want to revalue. You can enter multiple ranges of accounts. The accounts do not have to be valid, nor do individual segment values. You can also specify parent accounts in the balancing and account segment. If the same parent is specified in the low and high values for the balancing or account segment, the appropriate Expand Parent checkbox is checked. This is a display only checkbox. If you specify different values in these segments, the check is not displayed, and parent accounts are treated as child ranges.

5. Click on Revalue to launch the concurrent program. This automatically saves your work.

Revaluation Submission

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1. If you launch the Revaluation program submission form from the Revaluation form, the name of the current revaluation defaults in. This can be changed to any saved Revaluation using the List of Values. You can also run the program from the Standard Request Submission form (Requests/Run/Standard), choosing any saved Revaluation from the List of Values.

2. Choose a period to run the revaluation for. Only open periods are displayed in the List of Values.

3. The Effective Date defaults in, but can be overwritten. If you enter an effective date outside the period, the Revaluation program will change this to a valid date. The default date depends on the following rules:

Previous period – the last day of the period

Current period – the current system date

Future period – the first day of the period

4. The rate date defaults to the Effective Date. Changing this will only have an impact when the revaluation uses Daily Rates. If the profile GL Revaluation: Days to Roll Forward Daily Rates is set to a number greater than 0, the program will track backwards to find a valid rate if necessary, up to the number of days specified in the profile.

5. If you want to schedule the revaluation to run periodically, choose the schedule button, and complete the necessary information. Enable the increment checkbox if you select Periodically or Specific Days in the schedule, so that the Effective Date and Rate Date are incremented on each run. The period will only increment at the end of the period.

6. Click on Submit to submit the Revaluation program.

Profile Options New Profile option:

GL Revaluation: Number of Days to Roll Forward Daily Rates Use this profile option to determine how many days into the past the Revaluation program will go to find a daily rate for the currency, when Revaluation is being run using Daily Rates. If no rate is defined for the date the Revaluation is being run for, General Ledger will use this profile to determine how many days in the past it can go to in order to find a rate. If a rate is found, this is used in the revaluation. If no rate is found, revaluation for that currency will fail, and the execution report will show “Missing Rate”. The default for this profile is 0 – General Ledger will only use the rates specified for the date requested in the program submission.

You can only review this profile option at the user level. Your System Administrator can set this profile option at the site, application, or responsibility level.

Changed profile option:

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MRC: Maximum Days to Roll Forward Conversion Rates This profile option will now be used in revaluation. If a revaluation rate is not defined for the specified revaluation rate date, the Revaluation program should search prior days up to the value of this profile option to locate a rate. If a rate is used from a prior day, this will be printed in the Revaluation execution report and the revaluation will complete with a warning.

Obsolete profile option:

GL: Revaluation: Autoquery Last Run Ranges This profile option is no longer required, as it is possible to define multiple Revaluations, each with its own settings.

Reports If the Revalue Balances program does not find a rate to use for revaluation, it will complete with a status of Warning. The output file will list the currencies for which a rate could not be found. Journals will be created for those currencies where a revaluation rate was found. Previously, the program would end in error if no rate was found.

The program can now be submitted from the Submit Requests form.

Function Security It is possible to restrict access to the Revaluation program, whilst still allowing users access to the Revaluation form. This is achieved by excluding the function “Revaluation: Submit” from the relevant responsibilities. The button will be greyed out on the Revaluation form.

It is possible to restrict access to the Revaluation form in the same manner. Exclude the function “Revaluation” from the relevant responsibilities. Revaluation will not be displayed on the menu for that responsibility.

It is also possible to restrict access to the Revaluation program by modifying the request group so it will no longer appear on the submit form.

For more information on Function Security, Menus, and Request groups, please refer to the Oracle Applications System Administrators Guide.