Write Up/Down Adjustment Scenarios

If the lower or upper tolerance limit defined in the Bill Weighted Payment Distribution algorithm is met when a payment is matched against a bill using the Bill Weighted match type, the Write Up or Write Down adjustment is automatically created. The following scenarios indicate how foreign exchange gain or loss is calculated for write up or write down adjustments:

• Scenario 1 - Payment/Adjustment Freeze Date Not Equal to Bill Completion Date; Exchange Rate is Different; Payment Matched against a Bill with Two Bill Segments (BS1 - 50 INR; BS2 - 50 INR)

  	Bill Completion Date (04-30-2015)	Payment Freeze Date (05-14-2015)	Write Up/Down Adjustment (Against BS1) Freeze Date (05-14-2015)	Write Up/Down Adjustment (Against BS2) Freeze Date (05-14-2015)
  Exchange Rate From	USD	USD	USD	USD
  Exchange Rate To	INR	INR	INR	INR
  Exchange Rate	50	45	45	45
  Invoice/Payment/Adjustment Currency	INR	INR	INR	INR
  Invoice Amount	100	-	-	-
  Base Currency	USD	USD	USD	USD
  Booked Revenue in Base Currency	100/50 = 2	-	-	-
  Payment/Adjustment Amount	-	95	2.5	2.5
  Payment/Adjustment Amount in Base Currency on Bill Completion Date	-	95/50 = 1.9	2.5/50 = 0.05	2.5/50 = 0.05
  Realized Revenue (Payment/Adjustment Amount) in Base Currency on Payment/Adjustment Freeze Date	-	95/45 = 2.11	2.5/45 = 0.056	2.5/45 = 0.056
  Foreign Exchange Gain or Loss	-	1.9-2.11 = -0.21	0.05-0.056 = -0.006	0.05-0.056 = -0.006

  Observation: In the Scenario 1, two Write Up adjustments are created - one against BS1 and another against BS2. While freezing the payment which is matched against the bill, there is foreign exchange gain of 0.21 USD on 05-14-2015. However, while freezing the Write Up adjustments which are created against BS1 and BS2, there is foreign exchange gain of 0.006 and 0.006 USD, respectively, on 05-14-2015.