Revalue Accounts

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This topic require you to have fairly good accounting knowledge. You may want to seek your accountant or our support team for assistance.

 

Skip this topic if your company do not use the multi-currency feature.
 
If your reporting currency is in SGD and your bill to/from customers and/or  suppliers are in USD, EUR, JPY or you have banks in foreign currencies (USD, EUR, HKD etc).
Due to currency fluctuation, all balances (Customer/ Supplier accounts) in foreign currencies (may it be USD, EURO, JPY)  need to be revalued as at the financial reporting date (Balance Sheet As at....).
 

 

Why need to revalue a non-SGD account? ...Read more...

Example, if an invoice in USD1,000 of rate 1.5  that is issued (or received) in September is reported as SGD1,500 after translation. It is not paid as at Dec (reporting year end), and the Dec rate for USD is 1.400

 

The same USD1,000 will not be worth SGD1,500 now, in December but SGD1,400 instead because the rate had dropped from 1.500 to 1.400.

If the amount is due to a creditor, it would have been overstated in the trade creditor (current liability) that a debt is owed by your company $1,500 instead of $1,400. (Unrealised Gain in exchange)

 

 

It is required to report the debt at SGD1,400.00 (table rate) instead of the earlier SGD1,500.00 (transaction rate)

 

For a more accurate financial statement, you need to revalue your customer, supplier and general ledgers that are in foreign currency.

 

The process of a revaluation is to correct (reinstate) the above to reverse out the differences (and posted to the Unrealised Exchange gain/loss accounts in the GL) so that the foreign currencies balances are reported as at the year end (or month end) rate, as it is reported.

 

 

: Revalue Customer,supplier and general ledger in foreign currency

 


 

 

Next , go to topic: Revalue Customer

 


Related Topics

Aging

 

Transaction rate

 

Revalue Customer , Revalue Supplier

 

FAQ : Revaluation

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