jeenoo
Member
Australia will adopt the Australian equivalents to International Financial Reporting Standards (IFRS) for the full year reporting period beginning on or after 1 January 2005. These changes will also require the restatement of 2004 profit and loss and balance sheet using these new standards.
One of these new standards relate to an entity’s financial statements to be prepared in its functional currency, which is based on its primary economic environment (ie accounting standard AASB 121). For us, which primarily generates and expends cash in US dollar, this means that its profit and loss and balance sheet will be recorded in US dollars instead of AUD dollars. This change will necessitate extra functionality within the current JDE Accounting system to enable this change to take place.
In particular, an issue that has been identified is that AUD stores (ie inventory) need to be tracked not only in AUD dollars but needs to be translated to USD at historic exchange rate as per the accounting standard for non monetary items. The current functionality of restatement of ledger only enables transactions to be restated at GL date or Service/Tax rate. Whereas the correct accounting transactions should be recorded into stores at receipt date exchange rate and issued out of stores using the same exchange rate.
Restatment of Stores in the XA ledger (USD$)
AA Ledger XA Ledger
Date Transaction Unit Unit Price AUD$ Exchange USD$
AUD$ Rate
25/4 Receipt of goods 10 50.00 500.00 0.75 375.00
27/4 Receipt of goods 5 25.00 125.00 0.50 125.00
---- ------- -------- --------
Stock on hand 15 41.67 625 495.00
30/5 issue out all stock -15 41.67 625 0.65 (406.25)
------- ---------
Value of stock on hand Nil 88.75
Incorrect value USD $ in the balance sheet
The current solution identified by Peoples Soft to correct this problem is to raise manual journal entries. This is not a practical solution due to the large number of individual AUD transactions that go through the stores wharehouse on a daily basis.
Has anyone gone through this issue and got a solution? Or our approach of using XA ledger is not correct. <font color="black"> </font>
One of these new standards relate to an entity’s financial statements to be prepared in its functional currency, which is based on its primary economic environment (ie accounting standard AASB 121). For us, which primarily generates and expends cash in US dollar, this means that its profit and loss and balance sheet will be recorded in US dollars instead of AUD dollars. This change will necessitate extra functionality within the current JDE Accounting system to enable this change to take place.
In particular, an issue that has been identified is that AUD stores (ie inventory) need to be tracked not only in AUD dollars but needs to be translated to USD at historic exchange rate as per the accounting standard for non monetary items. The current functionality of restatement of ledger only enables transactions to be restated at GL date or Service/Tax rate. Whereas the correct accounting transactions should be recorded into stores at receipt date exchange rate and issued out of stores using the same exchange rate.
Restatment of Stores in the XA ledger (USD$)
AA Ledger XA Ledger
Date Transaction Unit Unit Price AUD$ Exchange USD$
AUD$ Rate
25/4 Receipt of goods 10 50.00 500.00 0.75 375.00
27/4 Receipt of goods 5 25.00 125.00 0.50 125.00
---- ------- -------- --------
Stock on hand 15 41.67 625 495.00
30/5 issue out all stock -15 41.67 625 0.65 (406.25)
------- ---------
Value of stock on hand Nil 88.75
Incorrect value USD $ in the balance sheet
The current solution identified by Peoples Soft to correct this problem is to raise manual journal entries. This is not a practical solution due to the large number of individual AUD transactions that go through the stores wharehouse on a daily basis.
Has anyone gone through this issue and got a solution? Or our approach of using XA ledger is not correct. <font color="black"> </font>
