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4 Replies Latest reply: Jan 15, 2013 2:36 AM by Ivruksha RSS

Disable Gain/Loss calculation for Secondary Ledger (SLA)

Krasen Y. Balgaranov Newbie
Currently Being Moderated
Hi Apps Gurus,
Currently I have the following functional SLA requirement:
I need to disable the Gain/Loss calculation in Secondary (subledger type) Ledger for AR invoice receipts in local/ledger currency. Below is the example, as it works now:
In the source primary ledger, on the AR invoice Receipt, there is NO gain/loss line, when paying ledger currency invoice on different date. But in the subledger accounting for secondary ledger there is calculated Gain/Loss line:
Example with Invoice No: 77775 in Receivables:
o     Primary Ledger currency: AUD
o     Secondary Ledger currency: USD
o     Invoice currency: AUD

     Invoice accounting entries for Primary Ledger:
-     GL date: 19-DEC-2012
-     Australia Spot rate for Primary ledger
Accounted_Currency=AUD, Entered_Currency=AUD
Revenue: Accounted_CR=4500.00 Entered_CR=4500.00
Recoverable Tax: Accounted_CR=450.00 Entered_CR=450.00
Receivable: Accounted_DR=4950.00 Entered_DR=4950.00     

     Invoice accounting entries for Secondary Ledger:
-     USA Spot rate for Secondary ledger
Accounted_Currency=USD, Entered_Currency=AUD
Revenue: Accounted_CR=4325.00 Entered_CR=4500.00
Recoverable Tax: Accounted_CR=435.00 Entered_CR=450.00
Receivable:     Accounted_DR=4760.00 Entered_DR=4950.00


     Receipt accounting entries for Primary Ledger:
-     GL date: 20-DEC-2012
-     Australia Spot rate for Primary ledger

Accounted_Currency=AUD, Entered_Currency=AUD
Cash: Accounted_DR=4950.00 Entered_DR=4950.00
Receivable:     Accounted_CR=4950.00 Entered_CR=4950.00

     Payment accounting entries for Secondary Ledger:
-     USA Spot rate for Secondary ledger

Accounted_Currency=USD, Entered_Currency=AUD
Cash: Accounted_DR=4855.00 Entered_DR=4950.00
Receivable:     Accounted_CR=4760.00 Entered_CR=4950.00
Exchange Gain: Accounted_CR=95.00 Entered_CR=0.00

And we do not need the Gain line, despite the Receivable account would not be closed for this AR Invoice in Secondary Ledger.
Is there any option, functional setup in SLA, to disable calculation of Gain/Loss in such cases?
Many thanks in advance!
Krasen
  • 1. Re: Disable Gain/Loss calculation for Secondary Ledger (SLA)
    Ivruksha Pro
    Currently Being Moderated
    Hi Krasen,

    the reason for system computing the EXCHANGE GAIN is due to change in exchange rates between the Invoice Stage and the Receipt Stage ...

    At Invoice Stage ..
    4950 AUD = 4760 USD ...(1.03991)
    At Receipt Stage ..
    4950 AUD = 4855 USD ... (1.019567)

    When the exchange rates are different(more or less) between Invoice stage and Receipt stage, the accounting entries (debit and Credits) will not balance unless the difference is posted to another account, in this case it is Exchange Gain Account ...
    Since it the way of accounting, modifying the logic is not possible ... you can uncheck the Exchange Gain Loss Journal Line type from the Subledger Accounting Method configuration, which would leave the journal entry unbalanced causing issues during create accounting execution and period close process .....

    If you want the account code combination used for recording the Exchange Gain/Loss that can be achieved by definition of an Account Derivation Rule as an workaround ....

    Regards,
    Ivruksha
  • 2. Re: Disable Gain/Loss calculation for Secondary Ledger (SLA)
    Krasen Y. Balgaranov Newbie
    Currently Being Moderated
    Hi Ivruksha,
    Thank you for looking into this case.
    Of course if the Invoice was in foreign currency, there have to be a Gain/Loss line in the Primary Ledger.
    But provided that in the Primary Ledger for NON-foreign currency invoice there is no FX lines, we don’t need such in the Secondary Ledger too. It’s a quite strange requirement, given the fact that the Receivable account balance will NOT be closed for this Invoice in the Sec. Ledger:
    Dr: (Invoice) 4760.00$ and Cr: (Receipt) 4855.00$
    So on the receipt I need the following acc. Entries for the Sec. Ledger (USD)
    Dr: Cash 4855.00$
         Cr: Receivable 4855.00$
    It is normal to have such functional behavior, provided that for the similar case in Payables there is NO FX line. See the example with AP Invoice in Sec. Ledger (USD):
    Invoice GL date: 19-Dec-2012
    Dr: Item Expense 4500.00 AUD / 4725.59$
    Dr: Recoverable Tax 450.00 AUD / 472.56$
    Cr: Liability 4950.00 AUD / 5198.15$

    Payment Gl date: 20-Dec-2012
    Dr: Liability 4950.00 AUD / 5184.46$
    Cr: Cash 4950.00 AUD / 5184.46$
    Fully balanced acc. entries, while the Liability account is definitely not closed from the both GL entries, which is accepted for the Secondary Ledger.
    Hope this clears a bit more the case. I’ll appreciate any useful suggestions.
    Of course the using “special” account code combination for recording the FX Gain/Loss in Sec. Ledger in the Account Derivation Rule as an workaround is a good option, if there isn’t any other.
    Thanks and regards
    Krasen
  • 3. Re: Disable Gain/Loss calculation for Secondary Ledger (SLA)
    Krasen Y. Balgaranov Newbie
    Currently Being Moderated
    Hi Gurus,
    any suggestions, ideas, help on the tread?
    Thanks
    Krasen
  • 4. Re: Disable Gain/Loss calculation for Secondary Ledger (SLA)
    Ivruksha Pro
    Currently Being Moderated
    Hi Krasen,

    i am still looking in to it .... i am just replicating this case in my environment and making few modifications on SLA and testing the results in Trial and Error method ...
    I would definitely comeback once i am done with my testing ....and share the results for every one ....

    Regards,
    Ivruksha

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