Fix unnecessary report created when request expense after retracting the previously submitted report

src/components/MoneyReportHeader.tsx

@@ -1080,7 +1080,7 @@ function MoneyReportHeader({
             icon: Expensicons.CircularArrowBackwards,
             value: CONST.REPORT.SECONDARY_ACTIONS.RETRACT,
             onSelected: () => {
-                retractReport(moneyRequestReport);
+                retractReport(moneyRequestReport, chatReport);
             },
         },
         [CONST.REPORT.SECONDARY_ACTIONS.REOPEN]: {

src/libs/actions/IOU.ts

@@ -10437,7 +10437,7 @@ function reopenReport(expenseReport: OnyxEntry<OnyxTypes.Report>) {
     API.write(WRITE_COMMANDS.REOPEN_REPORT, parameters, {optimisticData, successData, failureData});
 }
 
-function retractReport(expenseReport: OnyxEntry<OnyxTypes.Report>) {
+function retractReport(expenseReport: OnyxEntry<OnyxTypes.Report>, chatReport: OnyxEntry<OnyxTypes.Report>) {
     if (!expenseReport) {
         return;
     }
@@ -10483,6 +10483,21 @@ function retractReport(expenseReport: OnyxEntry<OnyxTypes.Report>) {
 
     const optimisticData: OnyxUpdate[] = [optimisticIOUReportData, optimisticReportActionsData, optimisticNextStepData];
 
+    if (chatReport) {
+        const iouReportActions = getAllReportActions(chatReport.iouReportID);
+        const expenseReportActions = getAllReportActions(expenseReport.reportID);
+        const iouCreatedAction = Object.values(iouReportActions).find((action) => isCreatedAction(action));
+        const expenseCreatedAction = Object.values(expenseReportActions).find((action) => isCreatedAction(action));
+        optimisticData.push({
+            onyxMethod: Onyx.METHOD.MERGE,
+            key: `${ONYXKEYS.COLLECTION.REPORT}${chatReport.reportID}`,
+            value: {
+                // The report created later will become the iouReportID of the chat report
+                iouReportID: (iouCreatedAction?.created ?? '') > (expenseCreatedAction?.created ?? '') ? chatReport?.iouReportID : expenseReport.reportID,
+            },
+        });
+    }
+
     const successData: OnyxUpdate[] = [
         {
             onyxMethod: Onyx.METHOD.MERGE,

tests/actions/IOUTest.ts

@@ -35,6 +35,7 @@ import {
     replaceReceipt,
     requestMoney,
     resolveDuplicates,
+    retractReport,
     saveSplitTransactions,
     sendInvoice,
     setDraftSplitTransaction,
@@ -8908,4 +8909,36 @@ describe('actions/IOU', () => {
             );
         });
     });
+
+    describe('retractReport', () => {
+        it('should restore the chat report iouReportID', async () => {
+            // Given a chat report with no iouReportID
+            const chatReport: Report = {
+                ...createRandomReport(0),
+                chatType: CONST.REPORT.CHAT_TYPE.POLICY_EXPENSE_CHAT,
+                iouReportID: undefined,
+            };
+
+            const expenseReport: Report = {
+                ...createRandomReport(1),
+                type: CONST.REPORT.TYPE.EXPENSE,
+                chatType: undefined,
+            };
+
+            // When retracting the submitted expense report
+            retractReport(expenseReport, chatReport);
+
+            // Then the chat report iouReportID should be set back to the retracted expense report
+            const iouReportID = await new Promise<string | undefined>((resolve) => {
+                const connection = Onyx.connect({
+                    key: `${ONYXKEYS.COLLECTION.REPORT}${chatReport.reportID}`,
+                    callback: (report) => {
+                        Onyx.disconnect(connection);
+                        resolve(report?.iouReportID);
+                    },
+                });
+            });
+            expect(iouReportID).toBe(expenseReport.reportID);
+        });
+    });
 });