3.2.2.2 Deal level reversal of Revaluation Entries

If you have opted for deal level revaluation reversal while defining FX Branch Parameters, you have to run the deal level revaluation reversal batch process before the EOD contract revaluation process is triggered. This batch process performs reversal of revaluation entries at the level of individual contracts.

See the chapter – Maintaining Data Specific to the FX Module – in this User Manual for more details on maintaining FX Branch Parameters for deal level revaluation reversal.

Refer to the chapter – Beginning of Day Operations – for details of running the deal level revaluation reversal batch process.

Note:

If you try to run the deal level revaluation reversal batch in spite of having opted for Account Revaluation as part of FX Branch Parameters definition, an error message is displayed.

The deal level revaluation reversal batch process involves the following:

For spot / forward contracts with NPV / Rebate revaluation

Revaluation entries posted into the Exchange P&L GL is reversed. If the processing date for the revaluation reversal batch process is the first day of a new financial year, the entries posted into the Previous Year Adjustment GL (maintained in the Chart of Accounts) is reversed. This is because, while closing the books of accounts for the previous year, the balances in the Exchange P&L GLs would have been transferred to the Previous Year Adjustment GL.

For details on maintaining Previous Year Adjustment GL, refer to the General Ledger (Chart of Accounts) User manual.

For forward contracts with Straight Line revaluation

Revaluation entries posted into the Exchange P&L GL are reversed, along with Forward Premium / Discount accruals. Current Premium / Discount accruals are not reversed. If the processing date for the revaluation reversal batch process is the first day of a new financial year, the entries posted into the Previous Year Adjustment GL (maintained in the Chart of Accounts) are reversed, instead of reversing the entries in the Exchange P&L GL.

For forward contracts with discounted straight line revaluation

No revaluation reversal takes place.

Refer to ‘Appendix A - Accounting Entries and Advices’ for the FX module’ for descriptions of Accounting Roles and Amount Tags and for generic event-wise accounting entries.

Note:

If you have opted for deal level revaluation reversal while defining FX Branch Parameters, revaluation reversal is triggered once before the liquidation of a contract. This reverses any existing entries in Exchange P&L GLs, as also forward premium/discount accruals.