ACCPAC- Accounting for Foreign Investments
Posted by TK Haran on Tue, Dec 08, 2009 @ 03:42 PM
To account for foreign investments such as Held for Trading or Available for Sales.
Both of these require being revalued at fair value at the reporting date, how do we revalue only those investments efficiently?
HFT
Make sure the account is setup as a Multicurrency account.
Currency which is invested is added in the multicurrency tab and marked under force revaluation as "yes"
ACCPAC revaluation codes should be checked for Gain and loss accounts. Here we need to give an account, that is an income statement account but closed with retained earnings.
AFS
Again make sure the account is selected for multicurrency and the investment account is added with the currency invested, importantly it is forced for revaluation.
However, the Gain or loss is charged to Other Comprehensive Income (OCI), so the gain or losses should be tracked separately from any other Exchange Gains & Losses account.
OCI is closed to AOCI (Accumulated Other Comprehensive Income).
It needs to be set up as with additional segment code "9999", and should be closed to segment 9999 retained earnings in Accpac. The segment should be selected for "Use in closing-Yes" under General Ledger Options-Segments Tab.
Revaluation Process
So now we are ready for revaluation, specific accounts need not be selected, in fact the whole account range can be selected there is no need to remember the account ranges.
But force to revalue should be turned off under Periodic Processing-Revaluation.
The revalue amounts is generated and can be checked for accuracy, post the entry and check your reports.
It gives us correct gain or loss amounts and YOU can avoid calculations & Manual Journal Entries.