Calculating Gains and Losses

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02/07/2008
4/21/2009 11:49:00 AM
Calculating Gains and Losses

Trigger:
Concept
You can use Oracle Payables to track currency gains and losses in your ledger currency
caused by exchange rate fluctuations.
You can use the following dates to track currency gains and losses:
Invoice GL date.
Payment issue date.
Payment maturity (for future dated payments).
Payment reconciliation or clearing with Oracle Cash Management.
If you enable the Payables option to account for gains and losses at payment issue time, then
Payables automatically calculates a realized gain or loss if a payment has a different exchange
rate than the foreign currency invoice it pays.
In this topic, you will calculate gains and losses, using the Invoice Workbench page.
Required Field(s)
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Last changed on: 4/21/2009 11:49:00 AM
Page 1

Procedure
Step
1
Action
Begin by navigating to the Invoice Workbench page.
Click the vertical scrollbar.
Click the Payables, Vision Operations (USA) link.
Click the Invoices link.
The Invoice Workbench is a group of pages that you use to enter, adjust, and
review your invoices and invoice batches.
You will use the Invoice Workbench page to calculate gains and losses.
Payables can track currency gains and losses in your ledger currency caused
by exchange rate fluctuations between the following dates:
Invoice GL date
Payment issue date
Payment maturity (for future dated payments)
Payment reconciliation or clearing with Oracle Cash Management
Page 2

Step
5
Action
You can have as many realized gain or loss accounts as you need. You can
define default Gain or Loss Accounts for Payables and override them for each
bank account you use.
If you enable the Payables option to account for gains and losses at payment
issue time, then Payables automatically calculates a realized gain or loss if a
payment has a different exchange rate than the foreign currency invoice it
pays. Payables charges
the amount to the appropriate Gain or Loss account assigned to the bank
account from
which you created the payment.
If you enable the Payables option to account for gains and losses at payment
clearing time, Payables automatically calculates a realized gain or loss when
you create accounting entries for a foreign currency payment that you
reconciled in Oracle Cash Management.
For example, to calculate gains and losses, you will install General Ledger
and Payables and define US dollars as the ledger currency for your ledger.
You then select Accrual Basis as your accounting method. You account for
payments and gain/loss at payment time only.
Begin by entering details of invoice headers.
Page 3

Step
Action
Click in the Trading Partner field.
Enter the desired information into the Trading Partner field. Enter "GE
Capital".
Click in the Supplier Site Name field.
10
Enter the desired information into the Supplier Site Name field. Enter
"BOSTON".
11
Click in the Invoice Date field.
12
Enter the desired information into the Invoice Date field. Enter "05-NOV2007".
13
Click in the Invoice Num field.
14
Enter the desired information into the Invoice Num field. Enter "INV FRN
30".
15
Click in the Invoice Curr field.
16
Enter the desired information into the Invoice Curr field. Enter "CAD".
17
Click in the Invoice Amount field.
18
Enter the desired information into the Invoice Amount field. Enter "1000".
19
Click the horizontal scrollbar.
20
Click in the Distribution Set field.
21
Enter the desired information into the Distribution Set field. Enter "ADV".
22
23
Click in the Rate Type field.
24
Enter the desired information into the Rate Type field. Enter "User".
25
Click in the Exchange Rate field.
26
Enter the desired information into the Exchange Rate field. Enter ".600000".
27
28
Click the 2 Lines tab.
Page 4

Step
29
Action
You will now enter the invoice details using the Lines tabs.
To calculate gains and losses you will enter two invoices, for example for an
amount of 300 pounds (GBP) with a Corporate exchange rate, and validate
the invoices.
The Corporate exchange rate on the date you enter the invoices is 2:1. When
you account for the invoices, Payables creates accounting entries in both the
foreign currency (300 GBP) and your ledger currency ($150 US) for both
invoices, and Journal Import creates one journal entry in your ledger currency
and one in GBP.
30
Click in the Amount field.
31
Enter the desired information into the Amount field. Enter "1000".
32
Click the Actions... 1 button.
or Press [Alt+c].
33
Step
34
Validate the invoices using the Invoice Actions page.
Action
Click the Validate option.
Page 5

Step
35
Action
Click the OK button.
or Press [Alt+K].
Step
36
Action
or Press [Alt+c].
37
When you account for the payments, Payables creates accounting entries in
both the foreign currency and your ledger currency for both payments. The
accounting entries for the gains and losses are in your ledger currency only.
Select the Create Accounting field in the Invoice Actions page to create
accountings.
Page 6

Step
Action
38
Click the Create Accounting option.
39
Click the Final Post option.
40
or Press [Alt+K].
Page 7

Step
41
Action
or Press [Alt+O].
Page 8

Step
42
Action
or Press [Alt+c].
Step
Action
43
Click the Pay in Full... option.
44
or Press [Alt+K].
Page 9

Step
Action
45
Click in the Trading Partner field.
46
Click in the Supplier Site field.
47
48
Click in the Payment Date field.
49
Enter the desired information into the Payment Date field. Enter "11-DEC2007".
50
Click in the Bank Account field.
51
Enter the desired information into the Bank Account field. Enter "BofA204".
52
53
Click in the Payment Method field.
54
Enter the desired information into the Payment Method field. Enter
"Check".
55
Click in the Payment Process Profile field.
Page 10

Step
Action
56
Enter the desired information into the Payment Process Profile field. Enter
"Check - GBP".
57
58
Click in the Rate Type field.
59
Enter the desired information into the Rate Type field. Enter "User".
60
Enter the desired information into the Payment Rate field. Enter "1.2".
61
Click in the Functional Amount field.
62
63

or Press [Alt+A].
64
Step
Select the Create Accounting field in the Payments Actions page to create
accountings.
Action
65
Click the Create Accounting option.
66
Click the Final Post option.
Page 11

Step
67
Action
or Press [Alt+O].
Step
68
Action
Click the Tools menu.
or Press [Alt+T].
69
Click the View Accounting menu.

or Press [A].
70
Journal Import creates one journal entry in your ledger currency and one in
GBP.
When you account for the payments, Payables creates accounting entries in
both the foreign currency and your ledger currency for both payments. The
accounting entries for the gains and losses are in your ledger currency only.
You can view these entries using the Sublegder Journal Entry Lines page.
71
Page 12
You have completed calculating gains and losses, using the Invoice
Workbench page.
End of Procedure.

Page 13

Calculating Gains and Losses - SPD

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System Process Document

TopicName<Inserts topic name>

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click the Payables, Vision Operations (USA) link.

Click the Invoices link.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click in the Trading Partner field.

Click in the Supplier Site Name field.

Click in the Invoice Date field.

Click in the Invoice Num field.

Click in the Invoice Curr field.

Click in the Invoice Amount field.

Click the horizontal scrollbar.

Click in the Distribution Set field.

Click the horizontal scrollbar.

Click in the Rate Type field.

Click in the Exchange Rate field.

Click the horizontal scrollbar.

Click the 2 Lines tab.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click in the Amount field.

Click the Actions... 1 button.

Validate the invoices using the Invoice Actions page.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click the Create Accounting option.

Click the Final Post option.

Click the OK button.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click the Pay in Full... option.

Click the OK button.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click in the Trading Partner field.

Click in the Supplier Site field.

Click the horizontal scrollbar.

Click in the Payment Date field.

Click in the Bank Account field.

Click the horizontal scrollbar.

Click in the Payment Method field.

Click in the Payment Process Profile field.

Last changed on: 4/21/2009 11:49:00 AM

System Process Document

Click the horizontal scrollbar.

Click in the Rate Type field.

Click in the Functional Amount field.

Click the horizontal scrollbar.

Click the Actions... 1 button.

Click the Create Accounting option.

Click the Final Post option.

Last changed on: 4/21/2009 11:49:00 AM