Dynamics 365 F&O/AX
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Foreign Currency Revaluation of Intercompany Accounts & Elimination
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Foreign Currency Revaluation of Intercompany Accounts & Elimination
Hi!
My team and I are having an issue with FX reval of intercompany accounts and am really hoping someone could provide feedback on how they have seen it done in the past.
We have about 8 or so different legal entities between US, Netherlands, France, Italy… etc. Our current process is to run reval on the children entities (US, Netherlands, France, Italy…), consolidate on the CONS company, eliminate the IC balances and reconsolidate on the CONS company. Theoretically if everything were to work out as expected, the intercompany balances would be fully eliminated on the CONS company but of course would still be sitting on the individual children (i.e. a payable on US and receivable on Netherlands).
The issue we are running into is since the intercompany accounts are balance sheet accounts, when we reval the children entities, D365 is constantly trying to reval the YTD balance of these IC accounts even if there may not be any transactional activity in that intercompany account for the month we are trying to consolidate. I think the intercompany accounts are acting properly as you would typically revalue the YTD foreign currency on balance sheets. However, since these entities are mostly euro functional entities, although there may be no transactions on that intercompany account for the month, if there was a prior balance in there, then there would be reporting currency (USD) generated from the FX reval.
With this in mind, when the team runs the elimination proposal, the entry is out of balance since there is only one transaction in this IC account (75K of foreign currency reval in USD associated with a 0 EUR transaction).
My questions are:
1a. What is supposed to happen here? Should our elimination journal be picking up the foreign currency reval that is associated with the YTD balance of that account?
1b. If so, how can we update the elimination proposal to do so?
I know this is a very confusing scenario just reading it so happy to give a visual of what is taking place. Any feedback is welcome!
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5 Replies
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Step 1: Create a Correction Journal
To fix an incorrect quantity received against a purchase order, the first thing you need to do is create a correction journal. Go to Inventory Management > Journals > Item Counting > Correction. In the correction journal form, you will need to select the warehouse where the goods were received, the purchase order number, and the item in question. Next, fill in the details of the correction; in this case, the correct quantity received.
Step 2: Post the Correction Journal
After creating the correction journal, the next step is to post it to the system. To do this, click on the Post button located on the toolbar at the top of the correction journal form. Once the journal has been posted, the quantity in the warehouse for the item will be updated, reflecting the correct amount received. However, the purchase order will still show an incorrect quantity.
Step 3: Create a Purchase Order Correction
To update the incorrect quantity on the purchase order, you will need to create a purchase order correction. Go to Procurement and Sourcing > Purchase Orders > All Purchase Orders. In the all purchase orders form, locate the purchase order in question and click on Edit. In the Purchase order form, go to the Corrections tab, and create a new purchase order correction. In the correction, fill in the details of the adjustment; in this case, the difference between the incorrect quantity received and the correct quantity.
Step 4: Approve the Purchase Order Correction
Once the purchase order correction has been created, it will need to be approved. To do this, go to the Purchase order correction form and click on the Submit button located on the toolbar at the top. After submission, the correction will be sent to the appropriate person for approval. Once approved, the purchase order will be updated, reflecting the correct quantity received.
Step 5: Mark the Correction as Complete
After the correct quantity has been updated on the purchase order, the last step is to mark the correction as complete. Doing this ensures that the correction will not be processed again and that the incorrect quantity will not be mentioned on any reports. To mark the correction as complete, go to Inventory Management > Journals > Item Counting > Correction. Locate the correction journal in question and click on the Complete button located on the toolbar at the top of the form.
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Hi @CrystalAhrens I don’t see Correction Journal under Inventory Management>Journals>Item Counting
Neither do I see a Corrections tab on a purchase order.
Is this a new feature in F&O that needs to be activated?
Thanks
Jameel
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