Conversion Variance

• Assessment method (field TYPECART)

This function automatically generates the conversion variances for the accounts managed with currencies whose Assessment method is assigned.

You have two options for the account setup:

By journal entry – Calculation based on detailed journal entries

If this assessment method is chosen, three evaluation types are eligible in the Evaluation type field: Fixed rate, Lower-value principle, or Higher-value principle.

It is calculated for each unmatched or partially matched journal entry by determining the difference between the balance in local currency of the journal entry and the balance in ledger currency valued at the new exchange rate.

By account balance - Calculation based on account balance (BALANCE table)

Whether or not the account is associated with a specific currency, the variance is assessed by the difference between the account balance in local currency at the end of the period and the balance in Ledger currency valued at the new exchange rate.

When processing the conversion variance calculation, carry-forward amounts are taken into account as soon as the indicated start date matches the fiscal year start date of the calculated ledger type.

With this method, you have the option to enter a Pivot currency to calculate a triangular conversion. This only applies to manual ledger types where the pivot currency is different from the ledger currency of each of the selected company for the chosen ledger type.

The pivot currency is not considered when the selected ledger type is associated with one or more automatic ledgers. In this case, the direct conversion calculation is applied to the automatic ledger types.

• Company group (field GRPSOC)

Enter or select a company or a group of companies to limit the generation of journals in the balance sheet or the result of a given company or group of companies.  

• Ledger (field LEDTYP)

For this field, select the Legal or IAS ledger type.

Regardless of the Assessment method, the process is carried out for a selected ledger. If the variance entry generation involves several ledgers, you must relaunch the function.

The journal entry type used must be manual, single-ledger.

When the variance journal generation is launched, if the ledger is the original ledger of an automatic ledger, both ledgers are impacted at the entry level. The type of exchange rate used to reevaluate the automatic ledger is then necessarily the one used for the original manual ledger.

The amount of the variance between the automatic ledger and its original manual ledger can have a different sign (credit or debit). If so, the process does not generate entries on two distinct accounts, but the automatic ledger inherits the variance account from its original manual ledger.

For both assessment methods, the accounts used to post the variance are those defined on lines 5, 6, 7 and 8 in the Chart of accountsfunction (GESCOA) when no variance account is defined for the reevaluated account. Otherwise, the variance accounts defined at the account level, lines 1, 2, 3 and 4, are used. The available values are:

Debit balance decrease

Debit balance increase

Credit balance decrease

Credit balance increase

Note: If a conversion variance account is used in the Account fields of the Accounts function (GESGAC), the process still checks that all the Miscellaneous accounts (lines 5, 6, 7, 8) are defined. If not, the following error message is returned: "Undefined accounts."

• Chart code (field COA)

This field displays the chart code for the selected Company group.

• Pivot currency (field PIVCUR)

When the Assessment method is By account balance, you can enter a currency that is different from the selected ledger type if associated with one or more automatic ledgers.

• Company (field SOC)

• Ledger currency (field LEDCUR)

• All sites (field TOUSIT)

If this checkbox is selected, all the sites of the current company are affected by the generation of the variance entries to the balance sheet or the results.

If not selected, you can select the All control accounts checkbox to process a specific site.

• Site (field SITE)

Enter or select a site to limit the process to that site.

• All control accounts (field TOUCOL)

For By journal entryAssessment methods reported for control accounts, select this checkbox to process all the control accounts. Use the Fromand To account fields and From and To BP fields to select an account or accounts.

If it is not a control account and this checkbox is not selected, only normal accounts types are processed.

• Control (field COLL)

• Control group (field GRPCOL)

• Start date (field DATDEB)

For Journal entry type variances, this process includes entries that are not closed at the end of the period. The beginning of the period must enable all the non-matched journals to be processed. The period start date is usually a date prior to the start date of the fiscal year.

For Account balance type variances, this process includes balances of accounts managed in currency, in other words on the balance. The period start is the start of the fiscal year.

• End date (field DATFIN)

• BP type (field TYPCOL)

If you run this process for all control accounts, you can limit the selection based on the BP type (customer, supplier, carrier, etc.).

• From account (field CPTDEB)

If you run the process for control accounts, use this range to limit the selection to specific BPs.

• To account (field CPTFIN)

• From BP (field BPRDEB)

• To BP (field BPRFIN)

• Rate type (field COURTYP)

In the currency exchange rate table, several exchange rates can be entered (see Currency exchange rates). It is possible to select the type and date of the exchange rate to be retained for the valuation of the journals at the end of the process.

The Average rate type is used by the conversion variance process when no rate type management is defined at account level. Otherwise it is the rate type defined on the reevaluated account that is taken into account.

 The default exchange rate is the period end date.

• Rate date (field COURDAT)

• Evaluation type (field EVALTYP)

This field is displayed only if the Assessment method is By account balance.

The posting are generated depending on the evaluation type:

Fixed rate: The conversion variance of a document is always posted.

Lower-value principle: The conversion variance of a document is only posted if there is a loss.

Higher-value principle: The conversion variance of a document is only posted if there is a gain

• Generate entries (field GENECR)

Select this checkbox to generate entries.

• Log file (field TRACE)

Select this check box for a summary of all documents generated at the end of the process.

When using a pivot currency for a triangular calculation, the log file displays the balance in the transaction currency, the initial value in ledger currency, the rates used for the recalculation, the revalued balance, and the variance.

• Generation type (field TYP)

• Entry status (field STA)

In the event of an actual generation, the status of the journal can be:

• Temporary
• Final

The entry status for entries must be Final when the requested generation type is Actual and the company meets one of the following criteria:

• French legislation company with the FRADGI - French fiscal regulation parameter (TC chapter, CPT group) set to Yes and not editable;
• Foreign company applying the French 'DGI no. 13L-1-06' compliance rules with the FRADGI - French fiscal regulation parameter (TC chapter, CPT group) set to Yes and editable.

The status defines your ability to modify the document. Once final, the modifications of the journal are only for information purposes or concern the analytical postings. The date, amounts, accounts, VAT code and other purely accounting information can no longer be modified.

In temporary mode, most of the information displayed on the journal can be modified. The modification options can vary based on:

• The nature and the origin of the accounting document:
  • Temporary payment document: bank line that cannot be deleted
  • Purchase invoice document: BP line that cannot be deleted, purchase account and VAT that cannot be modified

• The management events that have an impact on the account document are:
  • Charge account with a declared VAT amount
  • Matched VAT account or not

• Entry type (field TYPPCE)

The document type is used when:

• The generation type required is Actual and the CNVTYPACC - Conversion variance doc type (CPT chapter, CLO group) parameter has a document type selected.
• The generation type required is Active or Inactive Simulation and the TYPACC - Simulated journal type (TC chapter, INV group) parameter has a document type selected.

• Journal date (field DATPCE)

This field displays the date the variance entries are generated.

 The default date is the end date of the period.

• Journal (field JOU)

The journal code defaults from the journal type previously entered. The journal used for the reversal is the same as the original journal.

• Reversal date (field DATEXT)

The reversal date is determined by the automatic journal, Reversal line, according to the  GAUCNV - Conversion variance journal (CPT chapter, CLO group) parameter value.