Revaluation is a process which is typically run periodically to account for the loss/gain in the foreign currency. As an ex, if there is a transaction is foreign currency and it could have gained some value due to the economic differences. So revaluation process will take notice of this and create the new journals which account for the net loss/gain. So these journal will have to posted again. Revaluation process will not update the gl_balances.
You can translate your account balances from local currency into group currency. The translation is performed in accordance with FASB 52 (US GAAP) or IAS.
However, you can also perform the currency translation for other currency types.
We have to first do the revaluation part, the reason being if you have any foreign currency journals we have to do revaluation in order to capture the difference between the transaction date and period end date.
Later the translation process.
Revaluation : Period-end process where you assess value of ASSET (for example 1,000/- CASH foriegn currency .. say EUR ) according to new rates. Generally the value of your cash euro is not the same as it was the last month. So when you revalue it with new rate it gives you higher or lower value of same 1,000/- EUR. The difference is then transferred to/from gain/loss P&L account. Actual transaction/Journal is passed to capture this transaction.
EUR1,000/- @1.5 = USD1,500/-(USD is Functional Currency) as it appears on daily reports.
Revaluation is done and period end rate is @1.47
Now EUR1,000/- @1.47 = USD1,470/-(USD30/- is GAIN) will be transferred to profit and loss account. Now we can BUY EUR1,000/- for only USD1,470/-
Translation : For Balance sheet and reporting purposes only. No journal is passed. Any FC Balance in any summary account is translated into Functional currency balance to report on balance sheet tp other reports.