Base currency adjustments are a specific type of currency revaluation transaction that equalizes the balances of base currency and foreign currency accounts and it pauses the ongoing revaluation and reversal of unrealised revaluation amounts. Non-equity balance sheet accounts, excluding Accounts Receivable and Accounts Payable, are subject to base currency adjustments.
When we run revaluation at the end of the period, NetSuite will follow the below steps:
- The process initially verifies the balances of the accounts that are subject to revaluation by comparing the balances in base currency and foreign currency (transaction currency).
- If the transaction currency balance for an account is 0 but the base currency balance is not 0, the NetSuite will create a base currency adjustment revaluation record.
- When we run revaluation for the first time in a period, the process generates a base currency adjustment to eliminate the remaining base currency amount. The base currency adjustment posts to the base currency account and to the Unrealized Matching Gain/Loss account.
- The revaluation process creates currency revaluation transactions for all selected accounts. As the transaction currency balance and base currency balance are both 0 for accounts with the new base currency adjustments, currency revaluation is not triggered again for those accounts.
Rerun currency revaluation will delete the base currency adjustments created earlier and then re-created if appropriate. If additional transactions are posted to the account, then NetSuite will create an unrealized gain or loss currency revaluation transaction for the same.
Base currency adjustments apply to non-equity balance sheet accounts subject to revaluation and it is not required for Accounts Receivable and Accounts Payable accounts. It is a separate currency revaluation transaction record called Currency Revaluation (Base Currency Adjustment). Values used to calculate the adjustment are shown on the Details subtab of the record.
The revaluation process checks account balances as of the end of an accounting period. Base currency adjustments are not tied to individual transactions. It will be created only based on account balances. This type of currency revaluation record is created only if no unrealized gain or loss has been posted in the period for the account/currency pair. Base currency adjustments are shown on the Unrealized Exchange Rate Gains and Losses report.