foreign currency revaluation why it is required ?

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foreign currency revaluation why it is required ? ..

Answer / lakshmi

Foregn currency valuation is done not only for vendor open
items but also for customers as well as G/L accounts.

Where ever there is transaction involving foreign currency,
will do valuation of the same to arrive at gain/loss with a
change in exchange rate

Is This Answer Correct ?

11 Yes

1 No

foreign currency revaluation why it is required ? ..

Answer / ravi chandra singu

A foreign currency valuation is necessary if vendor accounts
contain open items
in a foreign currency. The amounts of these open items were
translated into the
local currency at the time they were entered using the
current exchange rate for
example, USD 500 to EUR 600, the local currency.
The exchange rate is probably different at the time of
closing, and open items need
to be valuated again. A program valuates the open items
using the new exchange
rate and enters the valuation difference EUR 10 in the
valuated line
items. It also creates the valuation posting.

Is This Answer Correct ?

9 Yes

0 No

foreign currency revaluation why it is required ? ..

Answer / bindu

according to my knowledge foreign currency revaluation
needed at the time of doing business with a foregin vendor
,foreign customer.
by the time when we take service from vendor for 10000 the
dollar rate wa 50 rs (suppose vendor is us person )so
according to this rate we have to give 500000rs according to
our local currency (inr)
but dollar rate always fluctuate .it may riase it may
down.in that scenario by the time of repayment suppose it is
45rs /1dollar .at that time we have to pay only 450000rs in
our local currency(inr)in this scenario we get 50000 profit .

suppose if dollar rate was 60 at the repayment time.then we
have to pay 600000.so we get 100000 loss.

in foreign currency revaluation we can know the profit or
lose we gain

Is This Answer Correct ?

6 Yes

0 No

foreign currency revaluation why it is required ? ..

Answer / rams@psr

Foreign Currency Valuation is required to valuating the Customers and Vendors open items, where the transactions has been done in Foreign Currency and also G/L A/C's which are operating in other then Local currency.

Is This Answer Correct ?

2 Yes

0 No

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