Exchange Rate Revaluation
Overview
Exchange Rate Revaluation – Business Overview
Exchange Rate Revaluation is a financial control document used to ensure that foreign currency balances in your accounts accurately reflect current exchange rates. It helps businesses recognize gains or losses caused by currency fluctuations, ensuring that financial statements present a true and fair view of the company’s financial position.
What Exchange Rate Revaluation Is Used For
In day-to-day business, companies often hold balances in foreign currencies—such as customer receivables, supplier payables, or bank accounts. Exchange rates change over time, which means the value of these balances also changes when measured in the company’s base currency.
Exchange Rate Revaluation is used to: - Recalculate the value of foreign currency balances at a specific date - Record unrealized foreign exchange gains or losses - Keep financial reports accurate and compliant with accounting standards - Support reliable decision-making and reporting
Prerequisites and Setup Requirements
Before using Exchange Rate Revaluation, the following should be in place:
- Foreign currency accounts (such as customers, suppliers, or banks) already in use
- Up-to-date and reliable exchange rates for the relevant currencies
- Properly defined accounts for recognizing foreign exchange gains and losses
- Regular accounting periods established, such as monthly or quarterly closes
These ensure that revaluation results are accurate and meaningful.
Typical Workflow and Business Process Fit
A common business workflow for Exchange Rate Revaluation looks like this:
Select the revaluation date
This is usually the end of a month, quarter, or financial year.Identify applicable accounts
Foreign currency balances that need revaluation are reviewed.Apply current exchange rates
The system recalculates balances using the latest rates.Review gains and losses
Differences between old and new values are identified.Record the revaluation
Unrealized gains or losses are recognized in the accounts.
This process typically forms part of the period-end closing activities and supports accurate financial reporting.
Key Business Scenarios Where It Is Essential
Exchange Rate Revaluation is especially important in situations such as:
- Businesses operating in multiple countries or dealing with international customers and suppliers
- Companies holding foreign currency bank balances
- Period-end financial reporting and audits
- Preparing management reports that reflect current financial exposure
- Compliance with accounting standards that require foreign currency remeasurement
Without regular revaluation, financial results can be misleading.
Important Considerations for Users
When using Exchange Rate Revaluation, users should keep in mind:
- Revaluation usually records unrealized gains or losses, not actual cash movements
- It should be performed consistently at defined intervals
- Exchange rates used must be accurate and aligned with company policy
- Revaluation entries may need to be reversed in the next period, depending on accounting practices
- Clear review and approval processes help prevent errors in financial statements
Exchange Rate Revaluation plays a critical role in managing currency risk and maintaining accurate financial records, especially for businesses with international exposure. When used correctly, it strengthens financial transparency and confidence in reported results.
Basic Information
- Module: Accounts
- Document Type: Other
Fields
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| posting_date | Posting Date | Date | ✓ | - | Accounting date for Dafater exchange rate revaluation posting |
| roundinglossallowance | Rounding Loss Allowance | Float | - | Allowed rounding difference to absorb minor Dafater revaluation losses | |
| company | Company | Link | ✓ | Company | Company for which Dafater performs exchange rate revaluation |
| get_entries | Get Entries | Button | - | Fetch eligible foreign currency balances for Dafater revaluation | |
| accounts | Exchange Rate Revaluation Account | Table | ✓ | Exchange Rate Revaluation Account | Accounts included for exchange rate revaluation in Dafater |
| gainlossunbooked | Gain/Loss from Revaluation | Currency | Company:company:default_currency | Unrealized gain or loss from Dafater exchange rate revaluation | |
| gainlossbooked | Gain/Loss already booked | Currency | Company:company:default_currency | Gain or loss already booked through previous Dafater revaluations | |
| totalgainloss | Total Gain/Loss | Currency | Company:company:default_currency | Net gain or loss from current Dafater exchange rate revaluation | |
| amended_from | Amended From | Link | Exchange Rate Revaluation | Original Dafater revaluation document this record amends |
Child Tables
Exchange Rate Revaluation Account (Exchange Rate Revaluation Account)
| Field Name | Label | Type | Required | Options | Description |
|---|---|---|---|---|---|
| account | Account | Link | ✓ | Account | Dafater account subject to foreign currency revaluation |
| party_type | Party Type | Link | DocType | Type of party linked to this Dafater account | |
| party | Party | Dynamic Link | party_type | Specific customer, supplier, or entity linked for revaluation | |
| account_currency | Account Currency | Link | Currency | Foreign currency in which the Dafater account is maintained | |
| balanceinaccount_currency | Balance In Account Currency | Currency | account_currency | Current balance in the account’s original foreign currency | |
| newbalanceinaccountcurrency | New Balance In Account Currency | Currency | account_currency | Recalculated foreign currency balance after revaluation | |
| currentexchangerate | Current Exchange Rate | Float | - | Existing exchange rate used before revaluation | |
| newexchangerate | New Exchange Rate | Float | ✓ | - | Updated exchange rate applied for revaluation |
| balanceinbase_currency | Balance In Base Currency | Currency | Company:company:default_currency | Account balance converted to company base currency | |
| newbalanceinbasecurrency | New Balance In Base Currency | Currency | Company:company:default_currency | Revalued balance in company base currency | |
| gain_loss | Gain/Loss | Currency | Company:company:default_currency | Resulting foreign exchange gain or loss amount | |
| zero_balance | Zero Balance | Check | - | Indicates whether account balance becomes zero after revaluation |
Permissions
| Role | Read | Write | Create | Delete | Submit | Cancel |
|---|---|---|---|---|---|---|
| Accounts Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| System Manager | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
| Accounts User | ✓ | ✓ | ✓ | ✓ | ✓ | ✓ |
Related DocTypes
| DocType | Relationship | Module |
|---|---|---|
| Company | Links to | Setup |
| Exchange Rate Revaluation | Links to | Accounts |