In FirstBIT ERP, businesses handle multiple currencies through two main types: the Accounting Currency (for recording and reporting transactions) and the National Currency (the local currency used for defining exchange rates).
You can select the national and accounting currencies via the Accounting > Entity > Accounting Parameters form. Since version 2.1.1.30, each entity can choose its accounting and national currencies individually.
Exchange rate gains or losses can be calculated in two ways:
- For Each Transaction and at Month-End: Calculations are done for every transaction and again at month-end.
- Only at Month-End: Calculations are done only at month-end, ignoring individual transactions.
Choose the method by selecting "Calculate Exchange Rate Differences on Month Closing Only" in Administration > Service Settings > Money.
- GL accounts in foreign currencies (other than the accounting currency) such as Cash, Receivables, Payables, and Staff Settlements are revalued at month-end using the current exchange rates.
For example, a bank account with a 23,000 EURO balance on June 30, at an exchange rate of 4.40 (101,200 Dirhams), and a subsequent 15,000 EURO received on July 10 at 4.42 (66,300 Dirhams), results in a new balance of 167,500 Dirhams. By July 30, with an exchange rate of 4.45, the balance revalued to 169,100 Dirhams, showing a 1,600 Dirham gain.
For Payables and Receivables GL accounts, gains and losses are assessed at the document level. To calculate:
- Revalue the document amount using the month-end exchange rate.
- Compare this revalued amount with the amount at the last revaluation date (transaction date or previous month-end). A positive difference indicates a gain, while a difference indicates a loss