Foreign Currency Gain/Loss ("Intercompany Out of Balance")

Foreign Currency Gain/Loss (\"Intercompany Out of Balance\")

Several of our Accounts Payable batches report errors when the user tries to post them.

Please bear with me in this long and detailed multi-post explanation.

In the Work Centre, the errors follow this pattern:

=======================================================================================
Job R99999 XXXX9999 completed with error
Batch 123456 V in error
Document AE 98765432 01000 12/31/2013 CA

== AA 12/31/2013 98765432 Out of Balance
CAUSE ... The AA Ledger type for 12/31/2013 , document 98765432
is out of balance by -5895.6.
RESOLUTION .. Verify That each document within this batch is correct

== Intercompany out of balance
Your intercompany settlements are out of balance for this batch. The intercompany
settlement method being used is either '1' '2' or '3'. When using these methods of
intercompany settlements for out of balance companies, transactions between companies
are allowed. The post will create intercompany settlements for out of balance companies
but each document within the batch, as well as the batch as a whole, must be in balance
(debits equals credits).
Resolution: please clean up any out of balance entries and then repost this batch.
=======================================================================================

Re: Foreign Currency Gain/Loss (\"Intercompany Out of Balance\")

My observations based on my extensive but fruitless troubleshooting are:

* the transaction is NOT an inter-company transaction, but it is multicurrency
* the error batches originate from foreign currency transactions. the payables vouchers are foreign vouchers, as are the matched LPOs/Purchase receiver docs
* the "out of balance" amounts reported in the work center error messages correspond with the "Cost Variance" (F43121.PRVARC) seen in the voucher screen, i.e. the foreign currency gain/loss between the items being vouchered on the LPO/GRN value in local currency, and the local currency value of the matched items
* the error is encountered whether or not the variance is a gain or a loss.

Re: Foreign Currency Gain/Loss (\"Intercompany Out of Balance\")

General setup information that you may need to know includes:

G/A constants
* Intercompany settlements = 2, Detailed Interco Settlements
* Multi-Currency Version = Y, Activate multi-currency accounting and use multipliers to convert currency
* Allow Multi-Currency Intercompany Trans = Yes

A/P constants
* Offset Method = Y, One offset per document

Companies (3)
00000
01000
02000

* Post balances by currency: not selected

Supplier Master
G/L Offset for affected vendors = IMPO

Related AAIs
Payable account = Item No PCIMPO -> 01000.01000.311210 (Co.BU.Obj)
Realized gain/loss on Foreign Currency txn = Item No PG/PL -> 01000.01000.855100
UnRealized gain/loss on Foreign Currency txn = Item No PV/PW -> 01000.01000.855100
-- Post bals by currency PBC01/PBC02 - not set up, have some JDE installation defaults

Intercompany settlement = Item No ICCC -> 00000.01000.112170
Intercompany settlement = Item No ICCC -> 01000.01000.112170
Intercompany settlement = Item No ICCC -> 02000.02000.112170

I note that there is no PB<curr> specifically for foreign currency transactions, just a single PB AAI with a monetary account in the local currency. However, I note that the JDE document titled "Multicurrency processing implementation guide" states that, for foreign currency vouchers where a monetary bank account is assigned (by the system automatically or by the user manually):

(a) the monetary bank account and the voucher must have the same currency
(b) the base currency of the voucher and the base currency of the company must be the same

Requirement (a) is definitely not met in our system, unless the user enters the correct bank in the voucher, which I am yet to verify. Is this the issue?

Further research based on Internet advice:

* confirmed that G/L dates F0411.RPDGJ and F0911.GLDGJ are the equal in value (113365), as are RPCO and GLCO (01000)

Re: Foreign Currency Gain/Loss (\"Intercompany Out of Balance\")

A database query of 2 error batches in F0911 reveals:

FIRST BATCH
-------------------------
Accruals PV: 67,104.40 Dr
-------------------------

In this transaction, the PV for gain/loss is missing, but the local currency purchase receiver value is 67,104.40 and the voucher in local currency is 73,000 (a loss since we are paying more).
The out-of-balance amount is -5895.60 (same as the cost variance). Thus I conclude the system was trying to generate a credit Payables AE of 73,000 Cr, but the PV for the exchange loss is missing.

SECOND BATCH
-----------------------------------
PV Accruals: 201,822.48 Dr
PV Gain/Loss: 706,666.59 Dr
PV General Hardware: 673,973.08 Dr
-----------------------------------

Here the PV is present, together with a weird "general hardware" line.
My guess is that the system was trying to do the Payables AE of 1,582,462.15 Cr but did not "recognize" the PV Gain/Loss of 706,666.59, because the error message says, "out of balance by -706,666.59.