Corrections performed on financial tables for inflation are not reflected on official ledgers. However, such transactions should be recorded in an unofficial ledger. This ledger is determined as the inflation adjustment journal by the law. This option is located in the Ledgers and Lists menu of the General Ledger section. The filter options are:
Filter | Value |
|---|---|
Fiscal Period | Period entry |
Starting Report Month | Opening / Month entry |
Ending Report Month | Opening / Month entry |
Adjustment Date | Date entry |
Account Code | Group / Range |
Account Description | Group / Range |
Account Level | Data entry |
Listing | All / Has No Transactions |
Table Factor | Data entry |
Previous Period | Data entry |
Previous Year | Year Entry |
The Previous Year filter allows periods to be corrected according to the report end date, and adjustment results to be reflected on unofficial ledgers. Therefore, when this filter is not active, only the current period is adjusted. When the filter is active, the selected period is adjusted according to the report end date, and the related adjustment records are generated.
The ledger list is as follows:
Historical Values (Report Start Month-Report End Month) | Adjustment Records | Adjusted Values (Report End Month) | |||||||||
Adjustment Records | Inflation Adjustment Account | ||||||||||
Account Code | Account Name | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | ||
The Account Code and Account Name fields list the accounts matching with filter criteria by their codes. G/L transactions matching with the report start and end dates specified on the filter are scanned for each account. Debits and credits are transferred into the predefined Debit and Credit fields respectively.
Corrections should be applied on the following accounts:
- All non-monetary accounts,
- Income statement accounts (Financial tables for which income statement is checked),
- Cost accounts (Financial tables for which cost of goods sold is checked)
Other monetary accounts are adjusted and listed in the same way as the balance sheet. In this way, the predefined credit and debit transactions of the related account are adjusted, and transferred into the adjusted credit and debit columns. Differences between adjusted values and predefined values are reflected on the correction records.
If the result of the Adjusted Values - Historical Values operation is positive, it means that an increase has occurred. If the type of the value is debit, the difference is reflected on the debit and credit sections of correction records and inflation correction accounts respectively. If the type of the value is credit, the difference is reflected on the credit and debit sections of correction records and inflation correction accounts respectively.
If the result of the Adjusted Values - Historical Values operation is negative, it means that a decrease has occurred. In this case, the difference is reflected on the credit and debit sections of correction records and inflation correction accounts respectively.
Example:
Historical Values (Report Start Month-Report End Month) | Correction Records | Adjusted Values (Report End Month) | |||||||||||
Correction Records | Inflation Correction Account | ||||||||||||
Account Code | Account Name | Debit | Credit | Debit | Credit | Debit | Credit | Debit | Credit | ||||
150 | First Journal Item and Material | 10,000 | 5,000 | 2,000 | 1,000 | 1,000 | 2,000 | 12,000 | 6,000 | ||||
151 | Semi Finished Goods | 20,000 | 2,000 | 2,000 | 18,000 | ||||||||
152 | Finished Goods | 5,000 | 3,000 | 1,500 | 1,500 | 4,000 | 3,500 |
The lines of the Inflation Correction Journal above indicate that:
- The predefined debit and credit totals of the account code 150 are calculated as 10,000 TL and 5,000 TL respectively. When these accounts are revaluated according to inflation rates, the debit and credit totals are calculated as 12,000 TL and 6,000 TL respectively. According to this, the debit and credit of account number 150 require corrections of 2,000 TL and 1,000 TL respectively. The transfer transactions of this correction would be entering a debit of 2,000 TL and a credit of 1,000 TL to the Inflation Correction Account.
- The predefined debit totals of the account number 151 are calculated as 20,000 TL. When the transactions of this account are revaluated according to inflation rates, the debit total is calculated as 18,000 TL. According to this, a correction of 2,000 TL is required in order to obtain 18,000 (B) as the total of 20,000 (B) and 2000 (A) amounts of the account credit. Entering a debit of 2,000 TL to the Inflation Correction Account performs this correction.
- The predefined debit and credit totals of the account code 152 are calculated as 5,000 TL and 3,000 TL respectively. When the transactions of this account are revaluated according to inflation rates, the debit and credit totals are calculated as 4,000 TL and 3.500 TL respectively. According to this, a correction of 1000 (5000-4000) + 500 (3500-3000)= 1500 TL is required for the credit of the account number 152. Entering a debit of 1.500 TL to the Inflation Correction Account performs this correction.