| Description |
We need to add the following to the bank transfer screen:
* When there is a transfer from the functional currency to another currency no gain or loss is recognized ever (spot rate)
* When there is a transfer to the Functional currency of the company as defined in the company config there is a gain or loss recognized
*Example:*
*Functional currency USD*
|Transaction|Rate US to CAD|US bank Credit|Cad|Gain or loss|Rate type|
|Transfer 1000 usd to cad|1.25|-1000|+1250|0 (never)|spot rate on date of transaction|
|tranfer 1250 Cad to USD|1.10|1136.64|-1250|113.36|historic|
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1125-1 Cash 1136.64
1125-1 Cash 1136.64
Inbound to cad
|Account|USD |CAD| | |
|Cash 1|-1000|-1250| | |
|Cash 2|+1000|1250| | |
|Cash 2|-1000|-1250| | |
|Cash 1|1136.64|1250| | |
|Gain |-113.36| |Gain account for relaized in multicurrency setup| |
*Fields:*
* Transfer from account Currency
* Transfer to account Currency
* Rate from the rate table based upon the currency pair. (editable so rate can be entered)
* The Operational (USD) rate should be imputed (take the GL Balance in operational (USD) vs GL Balance in foreign (CAD) for the foreign cash account)
* divide the gl blance in operational by the balance in foreign to get the historic rate (weighted average historic rate)
* multiply the foreign amount by the rate (operational balance / Foreign balance)
* Take the difference between the historic rate and the current rate times the foreign tranaction amount to get the gain or loss
| |usd|Foreign|rate|
|current balance|1000|1250|1.250|
|Transaction|462.92|625| |
|Current rate| | |1.35|
|loss|37.08| | |
so the idea is - you funded your foreign accont when the rate was 1.25
now the rate is 1.35 so when you bring that money back to your operational currency you lost money
originally you gave 1000 usd to get 1250 CAD now the rate is 1,35 so you will get less us dollars bringing it back from canadian
so you must recognize the loss.
if you turned in your 1250 cad you would get 925.92
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Realized gain or loss should be posted to the realized gain account accounts payable
Setup in company config
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