Foreign Currency Revaluation for Bank Account in D365 FNOP

As per Accounting Requirement your Foreign Currency bank accounts should be revalued at current rate on closing date. Microsoft Dynamics 365 FNOP has this functionality for Ledger, Customers and Vendors, however there is no functionality available for bank account (Except for few regions).

Now in absence of this functionality, how this revaluation can be done, most of the times a solution given is that to perform revaluation on ledge account of that Bank Account, however the only problem in this approach is your Ledger and Bank module will not be reconciled.

Following is the work-around to achieve the result without having differences between Ledger and Cash & Bank Module.

Using USMF company where Accounting Currency is USD and we have a Foreign Currency Bank account, which is following in our Example:

Let us look at transactions of this Bank Account:

Now let us export these transactions to calculate the total of transactions in EUR and in USD

Now let us have a look at exchange rate between USD to EUR which is as follow:

As can be seen in above screenshot that earlier exchange rate was 1.29333 USD for 1 EUR and we have updated new exchange rate to 1.5 USD for 1 EUR.

Now if we want to revalue our bank accounts as of 31^st March 2019 our balance in EUR should remain same however our balance in USD should be increased as there is an exchange gain, following is working in excel:

So now as per calculation we need to book this USD 15,510.01 gain in system.

First, we will create a manual general entry in system, which will look something like this:

As can be seen in above screenshot same account is selected on both sides and amount is also same. So this will not create any impact on closing balance of Bank Account in EUR, however to book the impact in USD we will have to change the exchange rate.

Since we have to book gain therefore exchange rate on credit side will remain same, see below:

However, we will have to manually update the exchange rate o match the amount of gain we want to book, as can be seen in following screen:

 After updating exchange rate , you can see that the voucher is imbalance and the balance amount is exactly the amount of gain that we need to book. The reason we have taken Exchange rate as 15,502.51 (which is equal to 15,501.01+1.5) is to balance the 1.5 on Credit side.

Now the last thing we need to do is to create the third line in journal where the difference will be booked in Exchange Gain / Loss Account, make sure that you change the currency of third line to USD.

Conclusion: Although this is a manual approach, which means if we have 50 Foreign currency accounts, we have to do this manual calculation and manual entries however this will keep you Module and General Journal reconciled.

Hope this will be helpful, please feel free to give your suggestions / feedback in the comment.

The more knowledge you share the more you gain!

Regards

Muhammad Saad