Conversion Variance

• Assessment method (field TYPECART)

This function automatically generates the conversion variances for the accounts managed with currencies whose Assessment method is assigned.

You have two options for the account setup:

By journal entry – Calculation based on detailed journal entries

If this assessment method is chosen, three evaluation types are eligible in the Evaluation type field: Fixed rate, Lower-value principle, or Higher-value principle.

It is calculated for each unmatched or partially matched journal entry by determining the difference between the balance in local currency of the journal entry and the balance in ledger currency valued at the new exchange rate.

By account balance - Calculation based on account balance (BALANCE table)

Whether or not the account is associated with a specific currency, the variance is assessed by the difference between the account balance in local currency at the end of the period and the balance in Ledger currency valued at the new exchange rate.

When processing the conversion variance calculation, carry-forward amounts are taken into account as soon as the indicated start date matches the fiscal year start date of the calculated ledger type.

• Company group (field GRPSOC)

Enter or select a company or a group of companies to limit the generation of journals in the balance sheet or the result of a given company or group of companies.  

• Ledger (field LEDTYP)

For this field, select Legal or IAS ledger.

Regardless of the Assessment method, the process is carried out for a selected ledger. If the variance entry generation involves several ledgers, the function must be relaunched.

The journal type used must be manual, single-ledger.

When the variance journal generation is launched, if the ledger is an original ledger of an automatic ledger, both ledgers are impacted at the entry level. The type of exchange rate used to reevaluate the automatic ledger is then necessarily used for the original manual ledger.

The amount of the variance between the automatic ledger and its original manual ledger can have a different sign (credit or debit). If so, the process does not generate entries on two distinct accounts, but the automatic ledger inherits the variance account of its original manual ledger.

For both assessment methods, the accounts used to post the variance are those defined lines on  5,6, 7, and 8 in the Chart of account function (GESCOA) when no variance accounts are defined on the reevaluated account. Otherwise it is the variance accounts defined at account level lines 1,2,3,4 among the following values:

Debit balance decrease

Debit balance increase

Credit balance decrease

Debit balance increase

Note: If a conversion variance account is found in the Account fields in the Accounts function (GESGAC,) the process still checks that all the Miscellaneous accounts (lines 5/6/7/8) are defined. If not, the following error message is returned: “Undefined accounts.”

• Company (field SOC)

• All sites (field TOUSIT)

If this check box is selected, all the sites of the current company are affected by the generation of the variance entries to the balance sheet or the results.

If not selected, you can select the All control accounts check box to process a specific site.

• Site (field SITE)

Enter or select a site to limit the process to that site.

• All control accounts (field TOUCOL)

For By journal entry Assessment methods reported for collective accounts, select this check box to process all the collective accounts limited to a single collective account. Use the From  and To account fields and From and To BP fields to select an account or accounts.

If it is not a collective account and this check box is not selected, only normal type accounts are processed.

• Control (field COLL)

• Control group (field GRPCOL)

• Start date (field DATDEB)

For Journal entry type variances, this process includes entries that are not closed at the end of the period. The beginning of the period must enable all the non-matched journals to be processed. The period start date is usually a date prior to the start date of the fiscal year.

For Account balance type variances, this process includes balances of accounts managed in currency, in other words on the balance. The period start is the start of the fiscal year.

• End date (field DATFIN)

• BP type (field TYPCOL)

If you run this process for all collective accounts, you can limit the selection of collective accounts based on the BP type (customer, supplier, carrier, etc.).

• From account (field CPTDEB)

If the process is launched for collective type accounts, this range is used to limit the selection to specific BPs. Otherwise, it will be a range for general accounts.

• To account (field CPTFIN)

This function automatically generates the conversion variances for the accounts managed with currencies whose Assessment method is assigned.

You have two options for the account setup:

By journal entry – Calculation based on detailed journal entries

If this assessment method is chosen, three evaluation types are eligible in the Evaluation type field: Fixed rate, Lower-value principle, or Higher-value principle.

It is calculated for each unmatched or partially matched journal entry by determining the difference between the balance in local currency of the journal entry and the balance in ledger currency valued at the new exchange rate.

By account balance - Calculation based on account balance (BALANCE table)

Whether or not the account is associated with a specific currency, the variance is assessed by the difference between the account balance in local currency at the end of the period and the balance in Ledger currency valued at the new exchange rate.

When processing the conversion variance calculation, carry-forward amounts are taken into account as soon as the indicated start date matches the fiscal year start date of the calculated ledger type.

• From BP (field BPRDEB)

• To BP (field BPRFIN)

• Rate type (field COURTYP)

In the currency exchange rate table, several exchange rates can be entered (see Currency exchange rates). It is possible to select the type and date of the exchange rate to be retained for the valuation of the journals at the end of the process.

This rate type is used by the conversion variance process when no rate type management is defined at account level. Otherwise it is the rate type defined on the reevaluated account that is taken into account.

 The default exchange rate is the period end date.

• Rate date (field COURDAT)

• Evaluation type (field EVALTYP)

This field is displayed only if the Assessment method is By account balance.

The posting are generated depending on the evaluation type:

Fixed rate: The conversion variance of a document is always posted.

Lower-value principle: The conversion variance of a document is only posted if there is a loss.

Higher-value principle: The conversion variance of a document is only posted if there is a gain

• Generate entries (field GENECR)

• Log file (field TRACE)

Select this check box for a summary of all documents generated at the end of the process.

• Generation type (field TYP)

• Entry status (field STA)

In the event of an actual generation, the status of the journal can be:

• Temporary
• Final

The entry status for entries must be Final when the requested generation type is Actual and the company meets one of the following criteria:

• French legislation company with the FRADGI - French fiscal regulation parameter (TC chapter, CPT group) set to Yes and not editable;
• Foreign company applying the French 'DGI no. 13L-1-06' compliance rules with the FRADGI - French fiscal regulation parameter (TC chapter, CPT group) set to Yes and editable.

The status defines your ability to modify the document. Once final, the modifications of the journal are only for information purposes or concern the analytical postings. The date, amounts, accounts, VAT code, and other purely accounting information can no longer be modified.

In temporary mode, most of the information displayed on the journal can be modified. The modification options can vary based on:

• The nature and the origin of the accounting document:
  • Temporary payment document: bank line that cannot be deleted
  • Purchase invoice document: BP line that cannot be deleted, purchase account and VAT that cannot be modified

• The management events that have an impact on the account document are:
  • Charge account with a declared VAT amount
  • Matched VAT account or not

• Entry type (field TYPPCE)

The document type is used when:

• The generation type required is Actual and the CNVTYPACC - Conversion variance doc type (CPT chapter, CLO group) parameter has a document type selected.
• The generation type required is Active or Inactive Simulation and the TYPACC - Simulated journal type (TC chapter, INV group) parameter has a document type selected.

• Journal date (field DATPCE)

This field displays the date the variance entries are generated.

 The default date is the end date of the period.

• Journal (field JOU)

The journal code defaults from the journal type previously entered. The journal used for the reversal is the same as the original journal.

• Reversal date (field DATEXT)

The reversal date is determined by the automatic journal, Reversal line, according to the  GAUCNV - Conversion variance journal (CPT chapter, CLO group) parameter value.