IMOS On-Prem - Period FX Adjustments

Period FX Adjustments can be used for these purposes:

• Adjust FX Rate: To create temporary payments at a current exchange rate for outstanding non-base-currency invoices.
• Adjust Advance: To create Journal Entries to make the Account Analysis Report in Financials reflect the end of the period exchange rate for the AP/AR account balance when there are no base-currency advanced payments/receipts.
• Adjust Bank: To create Journal Entries to make the Cashflow Report in Financials reflect the end of the period exchange rate for bank balances.
• Clear Balance: To resolve differences in invoice and payment amounts caused by using different exchange rates on the invoice and payment.

In the Financials module center , under Period Closing, click Period FX Adjustments.

Adjust FX Rate

To adjust the FX rate, follow these steps:

1. Check the Exchange Rates form and make sure that exchange rates are entered for the Eff Date from which you want to adjust exchange rates. (This is the date to enter in the Accounting Date To field.)
2. Check the Account Periods form and make sure that there is an entry in the Exch Diff field for the date range for which you want to adjust exchange rates.
3. In the Accounting Date From and Accounting Date To fields, enter the date range for which you want to adjust exchange rates, from step 1. (This checks the Accounting Date of transactions.)
4. In the Action field, select Adjust AP/AR.
5. As needed, apply filters for Company(s), Curr(s), Counterparty(s), or Counterparty Type(s).
6. Click  to calculate the adjustment. A list of all invoices with an open balance appears.
   • Line items that are in the base currency are in red text. No adjustments will be made for these lines; they are for information only.
   • Line items that have a different currency than the base currency are in black text. These are the lines for which temporary adjustments will be posted.
7. Scroll through the list and review the items in black text.
8. If all amounts appear correct, click  to save. A Payment is automatically created against the original invoice for the amount in the Adjustment column, and then a Payment Reversal is created for the next date. The account set in Exch Diff in Account Periods is used as the clearing account for these two transactions. They can be seen in the Payments section of the Transaction Data Entry.

Adjust Advance

To adjust the AP/AR account balance, follow these steps:

1. Check the Exchange Rates form and make sure that exchange rates are entered for the Eff Date from which you want to adjust exchange rates. (This is the date to enter in the Accounting Date To field.)
2. Check the Account Periods form and make sure that there is an entry in the Exch Diff field for the date range for which you want to adjust exchange rates.
3. In the Accounting Date From and Accounting Date To fields, enter the date range for which you want to adjust exchange rates, from step 1. (This checks the Accounting Date of transactions.)
4. In the Action field, select Adjust Advance. The adjustment is based on the current existing advanced payments/receipts made in non-base-currencies.
5. As needed, apply filters for Company(s), Curr(s), Counterparty(s), or Counterparty Type(s).
6. Click  to calculate the adjustment. A list of payments that has been made to non-base-currency banks appears.
   • Line items that do not have a Close Exch Rate are in red text. No adjustments will be made for these lines; go back to check the Exchange Rates, as in step 1. After new exchange rates are entered, you need to close the Period FX Adjustment form and reopen it to see the changes.
   • Line items that have the necessary information are in black text. These are the lines for which adjustment Journal Entries will be posted.
7. Scroll through the list and review the items in black text.
8. If all amounts appear correct, select the line items to adjust, and click  to save. A Journal Entry ending in X is automatically created against the AP or AR account. In Account Analysis Reports, you see that the Journal Entries have adjusted the ending balance for the base currency based on the current exchange rates.

Adjust Bank

To adjust the Bank balance, follow these steps:

1. Check the Exchange Rates form and make sure that exchange rates are entered for the Eff Date from which you want to adjust exchange rates. (This is the date to enter in the Accounting Date To field.)
2. Check the Account Periods form and make sure that there is an entry in the Exch Diff field for the date range for which you want to adjust exchange rates.
3. In the Accounting Date From and Accounting Date To fields, enter the date range for which you want to adjust exchange rates, from step 1. (This checks the Accounting Date of transactions.)
4. In the Action field, select Adjust Bank. The adjustment is based on the current existing payments/receipts made to non-base-currency banks.
5. As needed, apply filters for Company(s), Curr(s), Counterparty(s), or Counterparty Type(s).
6. Click  to calculate the adjustment. A list of payments that has been made to non-base-currency banks appears.
   • Line items that do not have a Close Exch Rate are in red text. No adjustments will be made for these lines; go back to check the Exchange Rates as in step 1. After new exchange rates are entered, you need to close the Period FX Adjustment form and reopen it to see the changes. 
   • Line items that have necessary information are in black text. These are the lines for which adjustment Journal Entries will be posted.
   • Opening balance line items that reflect the Exchange Rate are labeled Adjust Bank (Beginning Balance).
7. Scroll through the list and review the items in black text.
8. If all amounts appear correct, select the line items to adjust, and click  to save. A Journal Entry ending in X is automatically created against the corresponding bank code. In Cashflow Reports, you will see that the Journal Entries have adjusted the ending balance for the base currency based on the current exchange rates.
9. In the example below, a payment of $10,000 in SGD is adjusted. When the payment was made, the exchange rate for USD:SGD was 1.2, so $8,333 USD was debited. However, the exchange rate is now 1.25, so a Journal Entry of 333.33 has been posted automatically to adjust the USD balance to be $8,000.
   
   

Clear Balance

To clear the balance, follow these steps:

1. Check the Account Periods form and make sure that there is an entry in the Exch Diff field for the date range for which you want to clear the balance.
2. In the Accounting Date From and Accounting Date To fields, enter the date range for which you want to clear the balance. Accounting Date To will be the posting date of the balance clear transaction.
3. In the Action field, select Clear Balance.
4. As needed, apply filters for Company(s), Curr(s), Counterparty(s), or Counterparty Type(s).
5. Click  to calculate the adjustment. A list is generated of all invoices with a zero invoice currency balance and a non-zero base currency balance.
6. Scroll through the list and review the items; these are the lines for which permanent adjustments will be posted.
7. If all amounts appear correct, click  to save. A Payment is automatically created against the original invoice for the amount in the Adjustment column. No reversal is created; these are permanent adjustments to clear balances on invoices caused by foreign exchange differences. The account set in Exch Diff in Account Periods is used as the clearing account for this transaction. It can be seen in the Payments section of the Transaction Data Entry.

Adjustment Calculations

Adjustments are calculated as follows:

• Adjust AP/AR: ((Amount - Amount Paid) / Exch Rate) - ((Amount - Amount Paid) / Close Exch Rate)
• Adjust Advance: (Advanced Paid/Received Amount / Exch Rate) - (Advanced Paid/Received Amount / Close Exch Rate)
• Adjust Bank: (Payment/Receipt Amount / Exch Rate) - (Payment/Receipt Amount / Close Exch Rate)
• Clear Balance: (Ttl Base Amt - Ttl Base Paid)