Setup Considerations: Revaluation in AP&C
You can use this topic to help make decisions when planning your configuration and use of revaluation in Adaptive Planning and Consolidation (AP&C). It explains:
- Why to set it up.
- How it fits into the rest of Workday.
- Downstream impacts and cross-product interactions.
- Security requirements and business process configurations.
- Questions and limitations to consider before implementation.
Refer to detailed task instructions for full configuration details.
What It Is
Revaluation is the process of calculating currency fluctuations over time, usually the difference between when you enter transactions during the period and the period end date. You can create revaluation rules to identify:
- Accounts that require revaluation.
- Currency rate type to revalue the foreign currency balances at period end.
Business Benefits
- Record the gains and losses caused by fluctuating exchange rates since the transaction date.
- Recalculate foreign currency amounts in your company ledger at period end enabling you to analyze your currency exposure.
Use Cases
On a daily basis, you might receive and pay supplier invoices that are in another currency. Since rates change daily, you might enter different exchange rates when entering and paying an invoice. As per U.S. Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Standards (IFRS) you must account for realized and unrealized gain and loss due to fluctuating exchange rates. To revalue your accounts at period end, you create a revaluation rule to record period end revaluations on foreign currency balances in specified ledger accounts.
Questions to Consider
Before creating revaluations, consider these questions:
Questions | Considerations |
|---|---|
Do you want to automate the creation of the revaluation journal? | If yes, create a revaluation rule that will automatically create a revaluation journal when you run the revaluation process. |
Do you want to run some rules separately or concurrently? | If concurrently, create revaluation group sets to group the revaluation rules you want to run concurrently. |
When do you want to create revaluations? | By default, Workday performs revaluation at the end of the period. You can also choose to create revaluations on a different date that you specify. Workday uses the currency rates in effect on the selected date to revalue your balances.
To maintain data integrity and prevent accounting discrepancies, we recommend that you consistently use one revaluation method within the same period. Avoid alternating between fiscal period- and date-based revaluations within the same period, as this can result in inaccurate balances. |
Recommendations
When configuring the revaluation rules on the
Create Revaluation Rule
task, consider these recommendations:
Option | Recommendations |
|---|---|
Company | If you select more than 1 company or company hierarchy, ensure that all of them share the same account set and fiscal schedule. |
Book Code | You can define separate rules for each book code.
If you leave this field blank, Workday revalues all results for the Blank book code. |
Balance or Activity | For revaluing balance sheet accounts, select Balance .
For revaluing income statement accounts, select Activity . |
Create Reversal | When you don't check it, Workday includes only incremental changes each period. |
Revaluation Currency Rate Type | Revalue revenues and expenses at the average period rate.
Revalue cash, account receivables, and account payables and other current assets and liabilities at the period end rate. Revalue certain investment accounts at the historic rate. |
Worktags to Retain on Target | Workday automatically defaults the primary balancing worktag. Add optional balancing worktags as needed.
Workday recommends selecting:
|
Requirements
- Configure revaluation rules if you want to create the revaluation journal automatically. Use these rules when you run revaluation during the close process to record period end revaluations.
- Run the revaluation as the final task before closing the period to ensure that Workday properly remeasures the allocated foreign transactions.
Limitations
- Workday revalues all accounts that have a balance. If you close an account, ensure that the account has zero balance for all worktag combinations in both the ledger currency and the transaction currency.
- Workday doesn't post revaluation results to a specific book code unless you define the book code in each Revaluation rule.
Tenant Setup
No impact.
Security
Domains | Considerations |
|---|---|
Set Up: Revaluation domain in the Financial Accounting functional area. | Can configure and group revaluation rules. |
Process: Revaluation domain in the Financial Accounting functional area. | Can run revaluations. |
Reports: Financial Accounting in the Common Financial Management functional area. | Can view revaluation results. |
Business Processes
Configure the
Revaluation Run Event
business process to run, process, and approve revaluation results.Reporting
Use the
Foreign Currency Revaluation
report to review:
- Revalued amount in accounts that have unpaid invoices with gains or losses due to currency fluctuations.
- Balance sheet account with a balance in a foreign currency.
Integrations
No Impact.
Connections and Touchpoints
Revaluations interact with these other areas in Workday:
Features | Considerations |
|---|---|
Banking and Settlement | Revalues monetary balances that are in foreign currency. |
Customer Accounts | Revalues uncollected receivables that are in foreign currency. |
Supplier Accounts | Revalues unpaid payables that are in foreign currency. |
Worktag Balancing | If balancing your books by worktag, include the balancing worktag type when you define your revaluation rules. |
Workday offers a Touchpoints Kit with resources to help you understand configuration relationships in your tenant. Learn more about the Workday Touchpoints Kit on Workday Community.