Exchange rate differences

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Create transactions for exchange rate differences

For theoretical aspects please visit the Revaluations and exchange rate differences page.

  • The exchange differences transactions are adjustment transactions that balance out the foreing currency account balance with the basic currency calculated balance. In essence, it is a matter of re-adjusting the values ​​in the basic currency, taking into account exchange rate loss or gain, due to the fluctuations of the exchange rates.
  • If these exchange rate differences are not recorded, there may be differences in the opening balances of the following year.
  • The exchange rate differences can be calculated at the end of the closing year or during the accounting period (for example at the end of a quarter). In this case the historical changes can be useful, as they allow you to have different exchage rates at specific dates.
  • The program calculates the exchange rate difference based on the balances at the specified date. It is therefore possible to calculate the exchange rate difference at a specific date, even if you have entered transactions after that date.

    For further explanations, see also the Exchange rate differences not booked page

The Calculate exchange rate differences dialog

The Create transaction for exchange rate variation... command, from the Account2 menu, calculates the revaluations for the foreign currencies accounts.

Date of the transactions for the exchange rate differences
Enter the date your exchange rate differences transactions should have. The program can create the transactions for the exchange rate differences even if there are transactions past the indicated date.

  • The program will suggest the final date of the current month, related to the last entered transaction.
  • If there are transactions for exchange rate differences with the same date, the program asks whether they should be replaced. The program considers the transactions for the exchange rates differences as existing if they have the same date, doc, description, accounts and currency and when there is no amount in the account currency.

Document number
Enter the document number your exchange rate differences transactions should have.

Use historical exchange rates (exchange rate rows with date)

  • when this option is not active
    • if in your Exchange rate table there are not historical exchange rates (exchange rates with a date) this option is not active
    • if the option is not checked the program will use the exchange rate in your Exchange rate table for the rows without date
    • if you are using historical exchange rates for the year closure, be careful that the exchange rate used should be the same as the current one.
  • when this option is active
    • The program shows the date of the exchange rate, found in the Exchange rates table, that will be used to calculate the exchange rate differences. It is going to be the exchange rate with a date equal or prior to the indicated date.
    • When calculating exchange rate differences at year end we suggest this option not to be activated
    • When booking exhange rate difference transactions at year end, the historical exchange rate must be the same as the current exchange rate, otherwise you get an error messagge saying that the echange rate differences have not been calculated (even though they have been).


Values used to create the transactions

For more information, we refer to our page Multi-currency transactions.

Amount of the transaction

  • Transactions for exchange rate differences are being created only for the accounts in foreign currency which, at the specified date, have a different balance in basic currency compared to the calculated one.
  • For the amount in basic currency, the difference between the account balance in basic currency and the account balance in foreign currency converted in basic currency is being used.

Account balance
For the calculation of the exchange rate differences, the balances in the account currency and in basic currency are being used, at the specified date.

Exchange rate profit and exchange rate loss accounts
As exchange rate profit and loss accounts are being used, in order of priority:

  1. The indicated accounts entered in the specific column of the chart of accounts.
  2. The exchange rate profit & loss accounts indicated in the File and Accounting properties.

Position of inserted rows
If, while imparting the command, you find yourself in the Transactions table, the rows are being inserted at the position of the cursor.
Otherwise, they will be inserted at the end or at the previous position in case they are replacing existing transactions.

Before using the command

  1. In the File and Accounting properties of the File menu, Foreign Currency section, make sure that the Exchange rate profit and loss accounts are being indicated. It is equally possible to indicate the same account for both the exchange rate profits or losses.
  2. Make sure that the accounts in foreign currency are being updated and that the balances in foreign currency of these accounts (for exemple bank accounts) correspond with the balance indicated by the bank.
  3. Update the current exchange rates of the Exchange rate table.
    You should indicate the closing exchange rates or those of a period's end in the rows without a date, in the Exchange Rate column (do not modify the opening exchange rate in the Rate Opening column). In order to calculate the Exchange rate differences, the program uses the exchange rates of the rows without a date. If these last ones are absent, the program gives an error message.

Exchange rates for the New Year

To have the Opening balances of the New Year in Basic currency correspond exactly with the closing balances of the preceding year,  the Opening Exchange rates of the New Year, indicated in the Exchange Rate table, have to be the same as those being used for the closing of the accounting, so:

  • The closing exchange rates have to be indicated in the Exchange rate column of the rows without a date;
  • The opening exchange rates have to be indicated in the Rate Opening columns of the roes without a date.

The procedure of creating a new year or of the updating of the opening balances, copies the closing balances (Exchange rate column, rows without date) of the previous year into the opening exchange rates (Exchange rate table, Rate Opening column,  rows without date) of the new year's file.

At the latest when the accounting period is being closed, the currencies need to revaluated in Basic currency, creating adjustment transactions for exchange rate loss or gain, due to the fluctuations of the exchange rates (for the theoretical aspects, please check Revaluations and exchange rate differences).

Differenze di cambio con i centri di costo

Il comando Crea registrazioni differenze di cambio non include eventuali differenze di cambio presenti nei centri di costo in moneta diversa da quella della contabilità. Queste differenze devono essere registrate manualmente a fine anno. La registrazione deve presentare unicamente l'importo in divisa della contabilità; indicare dapprima questo importo, poi il centro di costo interessato e la moneta del centro di costo. Al momento d'inserimento della moneta l'importo in divisa della contabilità verrà cancellato e dovrà quindi essere reinserito.




This documentation is outdated

The most complete and up-to-date documentation is the one of Banana Accounting Plus: Try it now

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