Voiding a transaction will reverse the GL impact of the original transaction in the general ledger. The foreign currency variance posting rules will not be posted in the void transaction process as the original and reversal entries have exchange rates will be the same.
The general Ledger Impact in creating a vendor bill for $100 in the transaction currency with the exchange rate to base currency 1.1 is:
Expense DR 110
Accounts Payable CR 110
While the payment of the bill, the exchange rate is 1.2. The general ledger impact is:
Accounts Payable DR 120
Bank Account CR 120
Realized Gain/Loss (default account) DR 10
Accounts Payable CR 10
After that, close the periods that the bill and payment are in, and create a foreign currency variance posting rule. The new rule posts all revaluations to a new revaluation account.
When we void the payment made in the previous period, the new foreign currency variance posting rule is ignored in this case. The exchange rate for voiding the payment is the same as the original payment. The general ledger impact in base currency for the voiding journal and currency revaluation reversal is as follows:
Bank Account DR 120
Accounts Payable CR 120
Accounts Payable DR 10
Realized Gain/Loss (default account) CR 10
Impact of Foreign Currency Variance Posting Rules on Foreign Exchange Revaluation Reports:
The Unrealized Exchange Rate Gains and Losses and Realized Exchange Rate Gains and Losses reports are not affected by the Foreign Currency Variance Mapping feature. However, we can customize these reports to add columns and filters.
The column “Variance Account” can be included in the reports. This column provides the posting account of foreign exchange variance lines. This field is also available as a report filter.
