Dear,

I have a question for currency transaction.

1. Account payable transaction was created as $100 ;
Dr) Raw materials 100,000
Cr) Account Payable 100,000
(at currency rate : $1 = 1,000 KRW(korean won)

2. Currency rate is changed as $1 = 1,100 KRW, then run
Write off currency differences(tfacp2240m000) ;
Unrealized Currency Loss 10,000 / Account Payable 10,000

3. Pay the account payable at $1 = 1,050 then;
Dr) Account payable 110,000
Dr) Realized currency loss 10,000
Cr) Cash 105,000
Cr) Unrealized currency loss 10,000
Cr) Realized currency profit 5,000

I think the system should create as follow the 3rd step as ;
Dr) Account payable 110,000
Cr) Cash 105,000
Cr) Realized currency profit 5,000

I don't know why the baan system create the accounts
"Realized currency loss" & "Unrealized currency loss" at
the 3rd step.

Please explain me the reason.

thank you very much.

Hi,

It is Ok that unrealized accounts appear in the document.
This takes care of reversing the unrealized amounts which were only temporary untill the payment.
Now that the payment rate is known it also creates the realized transactions.

By the way I found and reported to BaaN on 10/2002 that there is a bug in program tfcmg2106 regarding selecting the correct realized accounts when assigning advances to invoices.
I do not know if they fixed it. (I fixet it myself on our customized version)

Moshe

Actually, the correct way to book this in accounting should be:

Dr. AP 110,000
Dr. Realized currency difference loss 5,000
Cr. Cash 105,000
Cr. Unrealized currency difference loss 10,000

Because in this case, you'd have realized KRW 5,000 currency difference loss, since KRW lost value against USD between the times the AP was booked and paid.

Rgds,
Paul

For settting up parameters for unrealised currency profit/loss, if we attempt to define the GL code the cursor goes immediately to dimension field by default. I don't know how this happens and would like to seek experts comment on that how to solve this.

With regard to the problem on not being able to set up unrealized profit/loss at the Business Partner or Customer/Supplier, it was standard functionality.
( I do not know which Baan version you are using)

The reason you are facing this problem was because in your Company Parameter configuration, you have set to use the functionality of Unrealized profit/Loss by ledger account. So, check your set up in the GL Company Parameter.
If it you have set up to use this functionality, then the unrealized account must be set up at transaction Unrealized profit/loss by Ledger....(i forgot the exact wording) in the GL module.