Exchange rate variance gain or loss functionality

[tellas]

Hi,

I need help on Exchange rate variance gain or loss functionality in AP.

for both PO's (Expense and Invenotry Items) Match options.

Right from the po creation to Payment and payment clearing.


does anybody have the doc pls share with me.

Regards,
Satish
mail: chinna_satish@yahoo.com

[tgs100]

I will give you the concept below. You may refer to Oracle Payables User Guide if you need more details.

1. Create a foreign currency purchase order

2. Receive the goods

3. Create the invoice with the same PO currency and match with PO/receipt.
If the invoice exchange rate is different from PO exchange rate and if the item is expense item, then the difference amount will be posted to the accrual account.
If the invoice exchange rate is different from PO exchange rate and if the item is an inventory item, then difference amount will be posted to PO rate variance account defined in financial options setup.
Accrual Account - Dr
PO Rate Variance Loss- Dr (Gain- Cr)
To Liability Account

4. Make Payment
If there is a difference between invoice exchange rate and payment exchange rate, then the difference amount will be posted to the exchange rate gain or loss account.
Liability Account - Dr
Exchange Loss - Dr (Gain - Cr)
To Bank/Cash

Cheers,
Saravanan TG