Understanding the Monetary Account Valuation Program
Typically, you run the Monetary Account Valuation program (R09415) at the end of a fiscal period and calculate unrealized gains and losses prior to running financial statements. The program creates journal entries with a document type of JX (foreign currency revaluation) for the unrealized gains and losses.
The Monetary Account Valuation program calculates unrealized gains and losses as follows:
Compares the currency code of selected accounts with the currency code of the company with which the account is associated. Stated another way, it compares foreign balances in the foreign currency (CA) ledger with domestic balances in the actual amounts (AA) ledger.
Retrieves an exchange rate from the F0015 table based on the comparison, using the as of date specified in a processing option.
Multiplies or divides the original foreign balance by the exchange rate to compute the new domestic balance.
Compares the new domestic balance with the original domestic balance to calculate the unrealized gain or loss.
The Monetary Account Valuation program creates a journal entry to record the unrealized gains and losses. The journal entry contains the currency code of the company and is a reversing entry because the gain or loss is not realized. It applies to the end of the period only.
The Monetary Account Valuation program prints a report that lists:
Domestic (AA) and foreign (CA) ledger balances as of the transaction date
Current domestic value of the ledger balances using the as of date that is specified in the processing options
Unrealized gain or loss amount
You can set the level of detail in a processing option and use this report as a trial balance that displays both foreign and domestic amounts.