Revaluation Questions

headley27

Let's say that there is a transaction that happened in a previous accounting period which is now closed. Unfortunately, that transaction has an incorrect associated cost due to a data entry error. There are no other transactions affected by this error. There is simply an improper cost that is attached to a single sale.

I would like to revalue that entry but a couple of immediate questions come to mind.

Question A

The Revaluation Journal autopopulates the Posting Date equal to that of the entry I am trying to fix. Therefore, I would have to reopen the previously closed accounting period. Since we have already closed this accounting period and this information has been reported to the bank, I am not sure that I want to revalue into a previous period. I would prefer to correct this entry by posting into the current period.

My logic is as such:

A value entry would be automatically created in the current period to correct the data entry error. The sum of all Value Entries give me my corrected cost which is displayed on the Item Ledger Entries Form. Associated G/L Lines are automatically created and posted into the current period to finalize this change.

To me, this makes the Operations & Sales Departments happy and at the same time causes the Accounting Department no grief as our financial reporting does not need to be amended.

So in short, would overridding the Posting Date to today's date (on the Revaluation Journals Form) work in this instance or is there something I am missing? I have tested this in an offline database and it seems to work.

Question B

I can see one potential problem. If there were subsequent entries affected by the initial data entry error, revaluation of these entries would more than likely not occur as their valuation dates would have occured prior to today's date (the override on the Revaluation Journals Form). Is this true?

Question C

Alternately, would there be any harm to allow the system to post into the previous period to catch all of the subsequent entries and then afterwards, manually modify the posting dates of the newly created Value and G/L Entries?

To me, this would fix all of the issues described in Questions A & B. If so, I can update the posting dates quickly via SQL Enterprise Manager.


Thank you very much for your input.

ara3n

Have you tried to use Item charge and apply it to the purchase receipt?
That way you don't have to change anything, It will add the additional cost based on what ever posting date you want and it will create the value entry you are looking for.

headley27

That won't really work for us in this instance. It's quite a tricky little thing that is very difficult to explain beyond what I have previously posted.

I am looking down another avenue for now.

Thanks ara3n.

julia8351

Good questions....any reply? I have the same confuses.

ssingla

headley27 wrote:

Alternately, would there be any harm to allow the system to post into the previous period to catch all of the subsequent entries and then afterwards, manually modify the posting dates of the newly created Value and G/L Entries?

To me, this would fix all of the issues described in Questions A & B. If so, I can update the posting dates quickly via SQL Enterprise Manager.

Don't even think this option. This can potentially ruin your system.