Cumulative update 7 for

Microsoft Dynamics AX 2012 R2

AR and AP
revaluation
for unrealized
gains/losses
This document describes the
defaulting logic for financial dimension
values when accounting for unrealized
gains/losses in cumulative update 7 for
Microsoft Dynamics AX 2012 R2.

White paper
April 2015

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Contents
AR and AP revaluation for unrealized gains/losses

Microsoft Dynamics AX 2.5

Microsoft Dynamics AX 3.0

Cumulative update 7 for Microsoft Dynamics AX 2012 R2 and later versions

AR and AP revaluation for unrealized gains/losses

AR and AP revaluation for unrealized gains/losses

The accounting entries that are created during the revaluation process are posted against two main accounts: the
unrealized gain/loss account and the accounts payable (AP)/accounts receivable (AR) account. The defaulting of the
main accounts has not been an area of contention, but how financial dimension values default has been a very
contentious area over many releases of Microsoft Dynamics AX. The issues arise when running the revaluation
process and defining the Dimension setting to Posting.
Over the lifespan of Microsoft Dynamics AX, customers have consistently told us that the financial dimension values
for the accounting entry should come from the original invoice when using Dimension = Posting. Unfortunately,
this statement original invoice can be interpreted in several ways, and this ambiguity has caused issues over various
releases.

Axapta 2.5
In Axapta 2.5, the default financial dimension values for both the unrealized gain/loss and AP/AR main accounts was
taken only from the AP/AR ledger accounts of the original invoice. This functionality supported the capability to
reconcile the subledgers of AR and AP to the general ledger, when including the financial dimension values. This is
shown in the following example.
Invoices accounting entry
Expense Department100

100.00 DR

Accounts payable Department200

100.00 CR

Invoice revaluation with a gain

Accounts payable Department200

5.00 DR

Unrealized gain Department200

5.00 CR

Axapta 3.0
In Axapta 3.0, customers requested support for the unrealized gain/loss to follow the profit and loss (P&L) accounts.
This was necessary so that customers could have better insight into the true cost or revenue of purchases and sales,
because the unrealized gain/loss on the P&L would reflect the same financial dimension values as the original
invoices costs and revenue. Customers could also include this information on various costing reports.
To meet this requirement, we added a new feature for the revaluation process that changed the defaulting behavior.
The default financial dimension values were now taken from the expense/revenue ledger account of the original
invoice. Unfortunately, this defaulting behavior was used for both the unrealized gain/loss and AP/AR main accounts,
as shown in the following example.

AR and AP revaluation for unrealized gains/losses

Invoices accounting entry

Expense Department100

100.00 DR

Accounts payable Department200

100.00 CR

Invoice revaluation with a gain

Accounts payable Department100

5.00 DR

Unrealized gain Department100

5.00 CR

As soon as this feature was released, bugs were logged, because customers could not reconcile the subledgers of AR
and AP to the general ledger for the AR/AP ledger accounts when the financial dimension value was included.
Therefore, the functionality was immediately changed back to the Axapta 2.5 functionality.
However, because of this change, customer requirements for Axapta 3.0 were no longer supported, which prompted
customers to request that the functionality from Axapta 3.0 be added back to Microsoft Dynamics AX.

Cumulative update 7 for Microsoft Dynamics AX 2012 R2

and later versions
In cumulative update 7, we wanted to address this issue, because we were receiving continuous requests for the
Axapta 3.0 functionality. It was essential that the new feature support both scenarios. Customers must still be able to
reconcile the subledgers of AR and AP to the general ledger at the level of financial dimension values. In addition,
the unrealized gain/loss financial dimensions must reflect the financial dimension values from the invoices
expense/revenue to ensure that the P&L reflects the same financial dimension values. Therefore, the accounting
entry for the revaluation process now is created as shown in the following example.
Invoices accounting entry
Expense Department100

100.00 DR

Accounts payable Department200

100.00 CR

Invoice revaluation with a gain

Accounts payable Department200

5.00 DR

Unrealized gain Department100

5.00 CR

In addition, the revaluation process is now consistent with the settlement process. Customers expect that default
financial dimension values will be taken in the same manner for the cash discount and the realized gain/loss that are
created during the settlement of a payment and invoice.

AR and AP revaluation for unrealized gains/losses

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