When we apply a payment to an invoice/bill, NetSuite calculates foreign currency variance and creates currency revaluation records. The payment record can be a payment, credit memo, customer deposit, or journal entry. Invoice, vendor bill, and journal will also be the source transaction of payments. The variances occur when the exchange rates of source transactions and payment transactions are different.
After the realized gain or loss calculation, a small difference sometimes remains between the posted base currency source transaction amount and the posted payment transaction amount plus variance. This small difference is due to rounding of the variance or adding together base currency amounts that were calculated separately. In a currency with a decimal precision of 2, for example, a difference of 0.04 or less is considered small.
To remove the small difference in the accounts payable or accounts receivable account between the source and the payment, NetSuite creates another currency revaluation transaction. This currency revaluation transaction record is called Currency Revaluation (Rounding Gain/Loss). This transaction is posted to the Rounding Gain/Loss account and either an accounts payable or an accounts receivable account.
The record “Currency Revaluation (Rounding Gain/Loss)” can be edited if the accounting period is open. The fields that can be changed are the Posting Period, Memo, and any fields in the Classification section. The rounding revaluation transactions cannot be deleted. Foreign Currency Variance Mapping is not available for rounding variance types.
To view currency revaluation transactions for rounding gain/loss, go to
Transactions > Financial > Revalue Open Currency Balances > List.
In the list, you can identify rounding transactions by account (Rounding Gain/Loss) and amount (very small).
There are two possible scenarios in which the base currency amount for the source transaction will be slightly different from the base currency for the payment plus the variance:
- Different exchange rates for the source and payment may cause rounding differences. That means, the invoice and payment record have exchange rate is different. When the invoice is paid, the currency revaluation created from the exchange rate difference may cause small rounding variances between the invoice and payment record. This difference is posted as rounding gain/loss currency revaluation transaction.
- Even when the exchange rate is the same, multi-line source transactions (transactions with more than one line) may not exactly match payments when both are converted to base currency. Multi-line transactions are converted to base currency line by line for posting to income or expense accounts (or deferred revenue or deferred expense). This can be seen in the GL impact of the transaction. The base currency amount posted to accounts receivable or accounts payable is the sum of the base currency lines. Applied payments convert the total to base currency and post to accounts receivable or accounts payable.