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Revaluation in Ebs General Ledger R12: Author: Mădălina Rusu
Revaluation in Ebs General Ledger R12: Author: Mădălina Rusu
Revaluation in Ebs General Ledger R12: Author: Mădălina Rusu
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Contents
Purpose Statement 1
Disclaimer 1
Disclaimers For Pre-Release, Pre-GA Products 1
OVERVIEW 3
Business Purpose 3
Revaluation 3
Considerations for business flow design 3
PROCESS 4
REVALUATION FLOW 5
Revaluation Formulas 5
Defining Revaluation Rate 6
Revalue Account Balances 7
Prerequisites: 7
Revaluation Reversal 10
Secondary Ledgers and Revaluation 10
Secondary Tracking Segment and Revaluation 10
REPORTS 11
Revaluation Execution Report 11
GL Open Balances Revaluation Report 11
AP/AR Open Items Revaluation Reports 11
PROFILE OPTIONS 12
GL: Income Statement Accounts Revaluation Rule 12
GL Revaluation: Number of Days to Roll Forward Daily Rates 12
MRC: Maximum Days to Roll Forward Conversion Rates 12
GL/MRC Revaluation: Use Primary Book Currency Instead of Entered Currency 12
GL Revaluation: Tracking by Cost Center 13
FUNCTION SECURITY 14
TECHNICAL DATA 15
COMMON ISSUES 16
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OVERVIEW
Business Purpose
International and local Accounting Regulations require companies to keep an updated record for the value of all open balances
represented in foreign currency. Payables and Receivables due to be settled in foreign currency, for example, are subject
to risks referring to potential changes in the exchange rates.
Revaluation
The process covers this concern, maintaining up-to-date in functional currency equivalent for the balances that have
transactions denominated in foreign currency. At the end of each accounting period the open transactions balances value is
recalculated for each foreign currency using the current exchange rate. The process generates differences which get recorded
under ‘unrealized gains and losses’.
On finally settling these transactions the gain/losses become realized for the balance sheet.
Revaluation reflects the change in conversion rates between the date of the transaction and the current market rate of each
currency.
Profile options setup should be considered so that Revaluation will be performed according to the business needs
(see Profile Options chapter)
If foreign currency Manual GL journal entries are created for the same accounts used in Revaluation, any
reconciliation with Subledger may be affected. Consider using Control Accounts for the purpose.
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PROCESS
When running 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.
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 define new Revaluations, update or delete existing Revaluations. You can launch any revaluation from the Revaluation
window or you can launch saved revaluations independently or grouped into Request Sets from the Submit Request window.
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REVALUATION FLOW
Revaluation Formulas
Revaluation will consider either PTD or YTD balances formula as per the account type and profile option setup.
Asset
Liability
Ownership's Equity
Expense (if profile option "GL: Income Statement Accounts Revaluation Rule" is set to YTD)
Revenue (if profile option "GL: Income Statement Accounts Revaluation Rule" is set to YTD)
Expense (if profile option "GL: Income Statement Accounts Revaluation Rule" is set to PTD)
Revenue (if profile option "GL: Income Statement Accounts Revaluation Rule" is set to PTD)
LESS
LESS
(period_net_dr_beq - period_net_cr_beq)
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Defining Revaluation Rate
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Revalue Account Balances
Prerequisites:
Define an unrealized gain/loss account.
Define a Cumulative Translation Adjustment account in the Ledger window.
Define a Revaluation rate for each currency and each period for which you want to run Revaluation.
Responsibility: General Ledger Superuser Navigation: Currency/Revaluation Form Name: GLXFCRVL
All Currencies: Allows you to run the Revaluation for all the currencies in single go. Creates single batch having separate
journal for each currency
Single currency: Allows to run Revaluation only for single currency
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This will navigate you to SRS window with a program ‘Program - Revalue Balances’ where you need to select the
parameters
When running revaluation, the process goes out and picks up the balances that are stored for the foreign currency,
where the translated_flag = "R", applies the revaluation rate that has been chosen, and calculates a new functional
currency amount. It then calculates what is already existing in the table for the functional currency amount. It
compares the two figures: What is wanted for the new functional currency balance to be vs. what the current
functional currency balance is. The difference between these numbers is then the revaluation adjustment.
Once the "Program - Revalue Balances" is completed, click on View Output. This will provide the Revaluation batch
created. The process names your Revaluation batch in the following format: Revalue <Period Name> <Concurrent
Request Date> <Concurrent Request Time>
Query the journal in the front end. Navigation: Journals > Enter
Provide the journal name and click on review journal.
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You can see only the accounted amounts populated, because the foreign currency balance will never change because of the
fluctuations and it is the functional currency balance which is going to change.
Additional Information:
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.
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.
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.
The following table summarizes the Revaluation journal entries generated by the Revalue button:
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Revaluation Reversal
When you reverse the Revaluation entry, General Ledger defaults the reversal period to the next period. You can change the
reversal period by choosing More Actions from the Enter Journals form. Choose the period you want to reverse the
Revaluation in.
As per original design, Revaluation journals of Primary ledger are not replicated in Secondary ledger.
Even if user define Revaluation source and category Revaluation with a Yes Conversion option the journals were not
transferred.
You would need to run Revaluation separately in the secondary ledger.
This functionality has however been implemented but you need to verify your patching code level for full features usage.
After the patch application Revaluation journals of primary ledger are replicated in secondary ledger conditionally by allowing
to update the journal conversion rule for the 'Revaluation' source (Prior to this enhancement, this was not updateable) in
Update Primary to Secondary Ledger Mapping page (navigate to Accounting Setup Manager, under Secondary Ledger select
*Primary to Secondary Ledger Mapping and see the Journal Conversion Rules Section).
For Journal Level secondary ledger, journal conversion of Revaluation source can be enabled ONLY IF primary ledger
and secondary ledger have same ledger currency.
For Subledger Level secondary ledger, journal conversion of Revaluation source can be enabled ONLY IF primary
ledger and secondary ledger have same ledger currency and subledger accounting method.
There are two segments flexible that are filled dynamically when revaluation is run: Balancing segment and Secondary
Tracking Segment.
Usually Secondary Tracking Segment is the cost center.
Note: The profile option, GL: Revaluation by Cost Center Tracking, must only be used where revaluation is the only aspect that
requires secondary segment tracking. You will be limited to using the cost center segment as the secondary tracking segment.
This applies to standard ledgers that do not have the Track by Secondary Segment option enabled, as well as average balance
ledgers, which are not eligible for the Track by Secondary Segment option.
General Ledger tracks retained earnings, cumulative translation adjustment and revaluation unrealized gain/loss specific only
to the balancing segment and secondary tracking segment value pair.
Leaving the Secondary Tracking segment (Cost Center in this case) empty is no longer needed.
You need to fill in the information for all the segments including the Cost Center one in the Unrealized Gain/Loss flexfield
template, then run revaluation normally and confirm the cost centers are updated properly in code combinations.
This account works like a template.
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REPORTS
This report shows the profit or loss on account of revaluation due to exchange rate differences on different dates.
All accounted revaluation records from all Journal categories and sources including manual and SLA are picked in this report.
The report groups and sorts the data by different account code combinations and currencies.
It may be run for a particular GL period, for a particular currency or all currencies.
Use the Open Items Revaluation report to revalue the balances of your open items.
This report takes into account changes in the value of your liabilities due to changes in foreign currency rates. You revalue
your liabilities based on the revaluation rate you specify, which is either an end of period rate or a daily rate.
The value of your open items before revaluation can be reconciled with your General Ledger Balances.
The Open Items Revaluation report determines the amount needed to manually adjust your general ledger balance to reflect
the difference between your original and revalued balance. This revaluation difference is calculated for each liability account
and summed for each balancing segment. You should reverse this general ledger entry at the beginning of the next period to
synchronize Payables/Receivables and general ledger balances.
You can run the Open Items Revaluation report for a revaluation period, up to a particular due date, and for a range of
balancing segment values. Make sure that you enter rate information for each currency that you use. Use the Include Up to
Due Date parameter to split your liabilities into short-term, mid-term, or long-term liabilities.
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PROFILE OPTIONS
Use this profile option to select either period-to-date (PTD) or year-to-date (YTD) income statement account balances for
Revaluation.
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.
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. 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.
When the profile is set to yes, the program will revalue the reporting ledger using balances from the primary ledger.
The profile looks at the actual balances in GL_BALANCES table where the ledger id is the primary ledger id and the
translated_flag is 'R'.
The profile only considers balances where the accounted DR/CR is not equal to zero.
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GL Revaluation: Tracking by Cost Center
If the profile option GL: Revaluation by Cost Center Tracking is set to Yes or No, the Revaluation checkbox will be ignored. To
use full secondary tracking segment functionality, ensure that the profile option is not set at any security level.
The profile option, GL: Revaluation by Cost Center Tracking, must only be used where revaluation is the only aspect that
requires secondary segment tracking. You will be limited to using the cost center segment as the secondary tracking segment.
This applies to standard ledgers that do not have the Track by Secondary Segment option enabled, as well as average balance
ledgers, which are not eligible for the Track by Secondary Segment option.
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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.
Revaluation definition takes into consideration the privileges defined in data access set
User can run revaluation only for those ledgers/ledger sets for which he has access to as per the data access set
Further to this, revaluation definition can also be secured using the Definition Access Set.
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TECHNICAL DATA
GL_BALANCES – includes details about the accounts balances in functional and foreign currencies
Each row includes a Revaluation's id, name, description, the corresponding ledger, the currency or currencies to be
revalued, and other Revaluation options. They include the currency conversion options, the unrealized gain account, the
unrealized loss account, and the automatic post flag. There is a one-to-many relationship from each Revaluation stored
in this table to the Revaluation account ranges stored in GL_REVAL_ACCOUNT_RANGES.
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COMMON ISSUES
1. Issue: What Is The Behavior For The Conversion Type in Secondary Ledger When Replicating Revaluation Journals
From Primary Ledger to Secondary Ledger Having The Same Currency (Doc ID 2578661.1)
Resolution:
As confirmed by Development in Bug 30183110 - REVALUATION REPLICATED IN SECONDARY LEDGER AS RATE TYPE
USER, whenever replicating secondary ledger journals with the same currency as primary ledger journals, then
'currency_conversion_type' for secondary journals would be 'User'.
This is the standard functionality.
2. Issue: GLCRVL Revaluation is Taking Place Even When Balance is Zero (Doc ID 294991.1)
Resolution:
This is the standard behavior and there is nothing wrong with it.
To stop this process if needed, then it is enough to null out the effect of the Revaluation Reversal Journal for that
account before running the Revaluation for that period.
a. Let generate the Reversal of the Revaluation Journal from previous period as usual.
b. On Enter Journals form delete the journal line corresponding to that account and adjust the contra
account to get the journal balanced.
c. Note: the profile Journals: Allow Multiple Exchange Rates needs to be set to Yes in order to override
the converted amount on the journal line.
d. Post the updated Revaluation Reversal Journal as usual.
e. Run the Revaluation program.
f. The new revaluation journal will not be created for this account because the balances are still zero.
This way the process is stopped until new foreign currency journals are entered for the account.
3. Issue: GLCRVL module: Program - Revalue Balances Fails With Warnings: CRVL0045 / CRVL0048 (Doc ID 1161343.1)
Even after defining Currency Rates and Revaluation definition correctly in the books, Revaluation program is completing
with warning and no Revaluation journal is created.
This happens even though the program is run for those code combinations that have foreign currency balances for the
period and are included in the Revaluation definition Account range.
Resolution:
Inquire for the code combination defined as Unrealized Gain/Loss Account in the Revaluation definition.
Define the required code combination and rerun Revaluation.
4. Issue: Error Faced for Posting Revaluation Journal - Failed to create or validate CTA account (Doc ID 984433.1)
5. Issue: Program - Revalue Balances ends with CRVL0047: There were overlapping account ranges defined in this
revaluation (Doc ID 1542476.1 )
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