fix: exchange gain/loss GL's should be removed if advance is cancelled (#34529)

* fix: report GL for invoice when advance has different exchange rate

If deferred revenue/expense is enabled for any item, don't repost.

* test: cancelling advance should remove exchange gain/loss

If there are no deferred revenue/expense cancelling advance should
cancel the exchange gain/loss booked due to different exchange rates
of payment and its linked invoice

erpnext/accounts/doctype/payment_entry/payment_entry.py

@@ -7,7 +7,7 @@ from functools import reduce
 
 import frappe
 from frappe import ValidationError, _, scrub, throw
-from frappe.utils import cint, comma_or, flt, getdate, nowdate
+from frappe.utils import cint, comma_or, flt, get_link_to_form, getdate, nowdate
 from six import iteritems, string_types
 
 import erpnext
@@ -168,8 +168,31 @@ class PaymentEntry(AccountsController):
 		for reference in self.references:
 			if reference.reference_doctype in ("Sales Invoice", "Purchase Invoice"):
 				doc = frappe.get_doc(reference.reference_doctype, reference.reference_name)
+
+				repost_required = False
+				for adv_reference in doc.get("advances"):
+					if adv_reference.exchange_gain_loss != 0:
+						repost_required = True
+						break
+				if repost_required:
+					for item in doc.get("items"):
+						if item.get("enable_deferred_revenue") or item.get("enable_deferred_expense"):
+							frappe.msgprint(
+								_(
+									"Linked Invoice {0} has Exchange Gain/Loss GL entries due to this Payment. Submit a Journal manually to reverse its effects."
+								).format(get_link_to_form(doc.doctype, doc.name))
+							)
+							repost_required = False
+
 				doc.delink_advance_entries(self.name)
 
+				if repost_required:
+					doc.reload()
+					doc.docstatus = 2
+					doc.make_gl_entries()
+					doc.docstatus = 1
+					doc.make_gl_entries()
+
 	def set_missing_values(self):
 		if self.payment_type == "Internal Transfer":
 			for field in (

erpnext/accounts/doctype/sales_invoice/test_sales_invoice.py

@@ -3470,6 +3470,78 @@ class TestSalesInvoice(unittest.TestCase):
 			"Accounts Settings", "Accounts Settings", "unlink_payment_on_cancel_of_invoice", unlink_enabled
 		)
 
+	def test_gain_loss_on_advance_cancellation(self):
+		unlink_enabled = frappe.db.get_single_value(
+			"Accounts Settings", "unlink_payment_on_cancellation_of_invoice"
+		)
+
+		frappe.db.set_single_value("Accounts Settings", "unlink_payment_on_cancellation_of_invoice", 1)
+
+		pe = frappe.get_doc(
+			{
+				"doctype": "Payment Entry",
+				"payment_type": "Receive",
+				"party_type": "Customer",
+				"party": "_Test Customer USD",
+				"company": "_Test Company",
+				"paid_from_account_currency": "USD",
+				"paid_to_account_currency": "INR",
+				"source_exchange_rate": 70,
+				"target_exchange_rate": 1,
+				"reference_no": "1",
+				"reference_date": nowdate(),
+				"received_amount": 70,
+				"paid_amount": 1,
+				"paid_from": "_Test Receivable USD - _TC",
+				"paid_to": "_Test Cash - _TC",
+			}
+		)
+		pe.insert()
+		pe.submit()
+
+		si = create_sales_invoice(
+			customer="_Test Customer USD",
+			debit_to="_Test Receivable USD - _TC",
+			currency="USD",
+			conversion_rate=75,
+			do_not_save=1,
+			rate=1,
+		)
+		si = si.save()
+
+		si.append(
+			"advances",
+			{
+				"reference_type": "Payment Entry",
+				"reference_name": pe.name,
+				"advance_amount": 1,
+				"allocated_amount": 1,
+				"ref_exchange_rate": 70,
+			},
+		)
+		si.save()
+		si.submit()
+		expected_gle = [
+			["_Test Receivable USD - _TC", 75.0, 5.0],
+			["Exchange Gain/Loss - _TC", 5.0, 0.0],
+			["Sales - _TC", 0.0, 75.0],
+		]
+		check_gl_entries(self, si.name, expected_gle, nowdate())
+
+		# cancel advance payment
+		pe.reload()
+		pe.cancel()
+
+		expected_gle_after = [
+			["_Test Receivable USD - _TC", 75.0, 0.0],
+			["Sales - _TC", 0.0, 75.0],
+		]
+		check_gl_entries(self, si.name, expected_gle_after, nowdate())
+
+		frappe.db.set_single_value(
+			"Accounts Settings", "unlink_payment_on_cancellation_of_invoice", unlink_enabled
+		)
+
 	def test_batch_expiry_for_sales_invoice_return(self):
 		from erpnext.controllers.sales_and_purchase_return import make_return_doc
 		from erpnext.stock.doctype.item.test_item import make_item