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Choose the method by selecting "Calculate Exchange Rate Differences on Month Closing Only" in Administration > Service Settings > Money.
Calculations if the option is enabled-
- 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.
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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
Realized gains and losses for transactions settled during the period are calculated at month-end using the exchange rate applicable on the payment date.
Calculations if the option is not enabled-
If the "Calculate Exchange Rate Differences on Month Closing Only" option is not selected, exchange rate differences are calculated continuously throughout the period as follows:
For each new foreign currency transaction, amounts are recorded in the accounting currency using the exchange rate effective on the transaction date. While exchange rate differences are not calculated for documents like Invoices or Invoice Received, all related foreign currency transactions and GL account balances are revalued based on the current exchange rate, with this date becoming the most recent revaluation date for those transactions.
For outgoing or incoming payments, such as Cash Receipts or Cash Payments, exchange rate differences are computed if the exchange rate on the payment date differs from that of the original transaction date. Additionally, all related transactions and GL account balances are revalued using the payment date's exchange rate, establishing this date as the latest revaluation date for the adjusted transactions.