2.5.1 Revaluation Reversal Scenario I - Along with the next Revaluation

The following tables show the revaluation reversal scenarios.

Table 2-3 DRVL (Contract Revaluation)

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
CONT_FAIR_VAL (Contract Fair Value GL)	CUR_NETRVL_ INC	Debit	150
NET_RVL_INC (Revaluation Income)	CUR_NETRVL_ INC	Credit	150

There is a net revaluation loss of USD 75 on the 1st of September. The reversal entries are triggered in next DRVL event, the entries posted are as follows:

Table 2-4 DRVL

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
CONT_FAIR_VAL (Contract Fair Value GL)	CUR_NETRVL_ EXP	Credit	75
NET_RVL_EXP (Revaluation Expense)	CUR_NETRVL_ EXP	Debit	75
NET_RVL_INC	PRV_NETRVL_ INC	Debit	150
CONT_FAIR_VAL (Contract Fair Value GL)	PRV_NETRVL_ INC	Credit	150

Note:

However, on maturity there will be no revaluation, and reversal of previous day revaluation is applicable on maturity. So system will fire DRRL event to post reversal entries. User has to maintain DRRL event to post the accounting entries on maturity.

Revaluation Reversal Scenario II - Next Day in BOD

Accounting entries passed on 01 August EOD

Table 2-5 Event DRVL (Contract Revaluation)

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
CONT_FAIR_VAL (Contract Fair Value GL)	CUR_NETRVL_ INC	Debit	150
NET_RVL_INC (Revaluation Income)	CUR_NETRVL_ INC	Credit	150

Accounting entries passed on the 2nd of August at BOD for the event DRRL are:

Table 2-6 DRRL

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
NET_RVL_INC	PRV_NETRVL_ INC	Debit	150
CONT_FAIR_VAL (Contract Fair Value GL)	PRV_NETRVL_ INC	Credit	150

Entries passed on the 1st of September for the event DRVL are:

Table 2-7 Accounting Entries

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
NET_RVL_EXP (Revaluation Expense)	CUR_NETRVL_- EXP	Debit	75
CONT_FAIR_VAL (Contract Fair Value GL	CUR_NETRVL_- EXP	Credit	75

If the 2nd of August happens to be the first day of a new financial year, the entries passed on that day during BOD are:

Table 2-8 Event DRRL

Accounting Role	Amount Tag	Debit/Credit Indicator	Amount
Previous Year adjustment GL	PRV_NETRVL_ INC_PY	Debit	75
CONT_FAIR_VAL (Contract Fair Value GL)	PRV_NETRVL_ INC_PY	Credit	75

This is because the revaluation profit and loss for the previous year (ending 1st August) would have been transferred to the Previous Year P&L Adjustment GL.

Note:

The revaluation reversal program will be called during the termination of the contract and final liquidation to reverse out any previous revaluation gain or loss. Refer the Accounting Entries of this manual.