UNDERSTANDING REVALUATION

Understanding Revaluation Workday is capable of multi-currency and multi-company transacting and reporting. The area of revaluation is often misunderstood and can cause frustration during month end close and when reviewing financial statements.

Revaluation is the process of calculating currency fluctuations between the time a transaction is entered and usually the period end date. Revaluation creates actual operational journal entries posted each ledger period.

Example: Company One records a supplier invoice of 100 EUR on January 15th .

1. Company One’s ledger currency is USD. Because of this, the Accounts Payable balance uses the current currency rate of 1 EUR to 1.115 USD to book the balance in USD for reporting purposes. 100 EUR x 1.115 (USD/EUR) = 111.50 USD

2. On January 31st, the accounts payable balance remains at 100 EUR or 111.50 USD.

3. Revaluation is run February 1st, as a part of the month end close process. Revaluation recalculates conversion of the 100 EURs to USD using the current exchange rate as of January 31st . 100 EUR x 1.1096 (USD/EUR) = 110.96 USD

4. The difference between what was already posted, and the period end date conversion is posted as an operational journal typically to an unrealized gain or loss ledger account. 111.50 USD – 110.96 USD = .54 USD

Helpful Reports:

- Find Revaluations: view all revaluation results by company, rule, book code, ledger currency or fiscal period. Drill into any result to view operational accounting.

- Foreign Currency Revaluation Report: Check to ensure revaluation is processed each period. Only Ledger Accounts that are a part of Revaluation Rules should be reviewed.

- Intercompany Elimination Out of Balance: Revaluation often supports intercompany eliminations. Check to ensure the revaluation journals are being included