Spot Rate Revaluation

Where a spot rate revaluation is required the following steps would normally be taken.

Alter the spot rates via the Currency Maintenance options.

Run a spot rate revaluation without updating the file, so that the effect of the change can be viewed.

When satisfied with the effect, re-run the revaluation selecting the option to update the files.

Run the remainder of the period end processes.

For each account the transactions are analysed and a spot-rate revaluation analysis record (type ‘8’) is written for each change account with the base currency exchange difference value.

The spot rate revaluation routine does not update the sales ledger or purchase ledger values. Its sole purpose is to generate transactions that will be updated into the nominal ledger.The effect of these transactions will be to revalue the nominal ledger control account to reflect the spot rate revaluations. Once these transactions are reversed in the nominal ledger (via standard journal entry) then the nominal ledger control account reverts to the true value of the ledger concerned.

It follows that you should never run a spot rate revaluation more that once at the end of the month. You will generate additional sets of revaluation transaction which update into the nominal ledger, multiplying up the effect of the spot rate revaluation.

Procedurally the spot rate revaluation operates as discussed above for the holding rate revaluation.