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Dynamics 365 Community / Blogs / The Dynamics Troubleshooter / How to Clean Up Residual Re...

How to Clean Up Residual Reporting Currency Balances in D365 Finance

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Paolo Cecchelli Profile Picture Paolo Cecchelli 659
With the advent of the Dual currency in Dynamics 365 there was the introduction of a very useful but often overlooked feature, the “Reporting currency adjustment journal”. This journal type allows to rectify only the reporting currency without posting anything on the accounting currency.
Why should such a feature be helpful? There are many scenarios that may require its use, among others the most common are:
  • Rounding Differences: Small discrepancies occur during currency conversion that need to be "cleaned up" at month-end;
  • Statutory Requirements: Some local tax authorities require specific exchange rates for reporting that differ from your daily operational rates;
  • Audit Adjustments: auditors might require an adjustment to the Reporting Currency valuation without wanting to touch the Accounting Currency (local) balance;
  • Consolidation Preparation: if your reporting currency is used for consolidation into a parent company, you might need to adjust the balance to match the parent’s expected valuation.

The setup
For this post I will use the company DEMF of the demo environment Contoso which has the accounting currency set to “EUR” and the reporting currency set to “USD”:



The first setup to be done is to create a General ledger journal of type “Reporting currency adjustment” under “General ledger > Journal setup > Journal names”:


 
Using the journal
Let’s say that we are clearing the balance sheet account “200110 - Accounts payable – other” from a reporting currency amount of 10 USD that remained opened on the account after the invoice was settled.  The variance is posted to the Exchange Gain/Loss account (801200), which is where the currency valuation discrepancies should have gone from the beginning.
To use the journal we have just created in order to do that, go to the menu “General ledger > Journal entries> Reporting currency adjustment journals”.
You will find that under the “New journal” you have the journal you have just created. Select it together with the company and click “OK”:
 
Then click on “Lines” to open the journal lines and insert the account in the first line and the offset on the second line:

Optionally, on the General tab you can indicate a reason code (to set it up, create it on the Financial reason menu and make sure the flag “Ledger” is enabled).



Results
After the posting, this is the resulting voucher in which, as you can see:
  1. The transaction currency is zero;
  2. The accounting currency is zero;
  3. The reporting currency is the only one that has been adjusted on the two accounts.


That’s all folks, see you next time!

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