The general ledger balance is calculated incorrectly when you create a bank reconciliation on a foreign currency bank account in the North American version of Microsoft Dynamics NAV 2009

Symptoms

Assume that you post a cash receipt journal that uses a foreign currency bank account in the North American version of Microsoft Dynamics 2009. You create an adjustment for the cash receipt journal by running the Currency Adjust Exchange Rates… function. In this situation, when you create a bank reconciliation on the foreign currency bank account, the general ledger balance in the suggested line is calculated incorrectly. The bank reconciliation calculation does not include the realized gain or the realized loss of the bank account.
This problem occurs in the following products:

• The North American version of Microsoft Dynamics NAV 2009 R2

• The North American version of Microsoft Dynamics NAV 2009 Service Pack 1 (SP1)

Resolution

Important The hotfix (2548309) has been reverted to the original code and should be removed from any databases where this change was applied. If you have made code changes that are described in the "Code changes" section, you can change the code back so that your code matches back to the "Existing code" section. If the code is not reverted, you can have a difference on the General tab of the bank reconciliation and then you cannot make a post.
The problem with a General Ledger (G/L) imbalance on the North American Database Bank Reconciliation in the original re-create scenario for this article was revisited and examined. Through further analysis, Product Management and Development determined that the issue that was reported with the imbalance is not the result of incorrect standard code for the Bank Reconciliation calculation but a data issue that is caused by the initial setup of the bank account. The incorrect initial setup of the bank account consisted of breaking the link between the bank account ledger entry and the G/L account ledger entry. The incorrect foreign currency bank account setup steps may include something that resembles the following steps:

1. Post a G/L journal to the bank account's G/L account for initial balance, for example G/L Account 11650.
   
   Note This transaction would typically be included as part of initial G/L trial balance setup.

2. Post a cash receipt journal entry to the bank account, in which the bank account posting group has a temporary G/L account, for example 11000, assigned, and any open un-reconciled transactions, such as open checks and cash receipts, to the bank account. The balancing account is also set to the same account, for example 11000, to generate a wash entry.

3. The bank account posting group account is then changed from the temporary G/L account to G/L account 11650. Therefore, the original entry that was posted to establish the detailed bank account setup in step 2 was to a different G/L account. Therefore, the link to the G/L entries is no longer established.

An additional incorrect setup for a foreign currency bank account would resemble the following:

1. Post a G/L journal to the bank account's G/L account for initial balance, for example G/L Account 11650.

2. Then post a General Journal to the Bank Account, with the balancing account set to the same G/L Account as specified within the Bank Account Posting Group, as in this case G/L Account 11650.

Again, there is no link between the G/L entry posted in Step 1 and the Bank Account Ledger Entry posted in step 2.

These steps are the incorrect way to process the start of a new foreign bank account. If you run this incorrect process, you may encounter the problem that is described in this article (2548309). This hotfix (2548309) was added to correct a specific scenario that was caused by the setup that resembles the previous scenario. However, different posting scenarios resulted in issues with continued imbalances if you set up a bank account but then do not keep the G/L account in the bank posting group, or if there is no direct link between the Bank Account entries and the G/L entries.

RECOMMENDATION: The recommended process for setting up a foreign currency bank would be similar to the following (assuming a local currency amount for the GL is $10,000).

Note – the following is based on a 1:1 currency exchange rate. G/L Amounts are updated in local currency. Therefore, manual calculations are needed for the bank Account so the GL is updated with the correct local currency amount.

1. When posting beginning trial balances to the GL, post the Bank’s GL Balance to a temporary G/L Account, such as G/L Account 11000, for $10,000.

2. Post a General Journal to the Bank Account, which has the Bank Account Posting Group set to the desired G/L Account, in this case G/L Account 11650. Here you would set the Balancing Account to G/L Account 11000, which is the initial temporary cash account that was originally posted as part of the setup of the beginning trial balance.
   
   -Posting this $10,000 entry will update both the foreign bank account and G/L Account 11650 for $10,000. It will also reduce that temporary G/L Account 11000 to $0 because of the offsetting balancing account from the transaction. By posting in this manner, there is a direct link between the bank ledger entry and the G/L account ledger entry. It is the correct way to process and handle the setup of a foreign bank account.

...
          REPEAT
            IF BankAccLedgEntry.GET(GLEntry."Entry No.") THEN BEGIN
              IF "Currency Code" <> BankAccLedgEntry."Currency Code" THEN BEGIN
                IF BankAccLedgEntry."Currency Code" <> '' THEN
                  "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtFCYToFCY("Statement Date",
                                                                          BankAccLedgEntry."Currency Code",
                                                                          "Currency Code",
                                                                          BankAccLedgEntry.Amount),
                                         Currency."Amount Rounding Precision")
                ELSE
                  "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtLCYToFCY("Statement Date",
                                                                          "Currency Code",
                                                                          BankAccLedgEntry.Amount,
                                                                          "Currency Factor"),
                                         Currency."Amount Rounding Precision");
              END ELSE BEGIN

                // Delete the folloiwng line.
                "G/L Balance" += BankAccLedgEntry.Amount;

              END;
            END ELSE BEGIN
              "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtLCYToFCY("Statement Date",
                                                                      "Currency Code",
                                                                      GLEntry.Amount,
                                                                      "Currency Factor"),
                                     Currency."Amount Rounding Precision");
            END;
          UNTIL GLEntry.NEXT = 0;
...

...
          REPEAT
            IF BankAccLedgEntry.GET(GLEntry."Entry No.") THEN BEGIN
              IF "Currency Code" <> BankAccLedgEntry."Currency Code" THEN BEGIN
                IF BankAccLedgEntry."Currency Code" <> '' THEN
                  "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtFCYToFCY("Statement Date",
                                                                          BankAccLedgEntry."Currency Code",
                                                                          "Currency Code",
                                                                          BankAccLedgEntry.Amount),
                                         Currency."Amount Rounding Precision")
                ELSE
                  "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtLCYToFCY("Statement Date",
                                                                          "Currency Code",
                                                                          BankAccLedgEntry.Amount,
                                                                          "Currency Factor"),
                                         Currency."Amount Rounding Precision");
              END ELSE BEGIN

                // Add the following lines.
                "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtLCYToFCY("Statement Date",
                                                                        "Currency Code",
                                                                        GLEntry.Amount,
                                                                        "Currency Factor"),
                                       Currency."Amount Rounding Precision");
                // End of the lines.

              END;
            END ELSE BEGIN
              "G/L Balance" += ROUND(CurrExchRate.ExchangeAmtLCYToFCY("Statement Date",
                                                                      "Currency Code",
                                                                      GLEntry.Amount,
                                                                      "Currency Factor"),
                                     Currency."Amount Rounding Precision");
            END;
          UNTIL GLEntry.NEXT = 0;
...

Status

Microsoft has confirmed that this is a problem in the Microsoft products that are listed in the "Applies to" section.

Note This is a "FAST PUBLISH" article created directly from within the Microsoft support organization. The information contained herein is provided as-is in response to emerging issues. As a result of the speed in making it available, the materials may include typographical errors and may be revised at any time without notice. See Terms of Use for other considerations.