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The system applies the official exchange rate for the transaction. However, if the transfer is processed using the bank’s commercial rate, which differs from the official rate, the resulting difference is treated as a bank expense (bank margin) and should be recorded in the Transfer Fee field.
Transfer Fee = (New Amount in Source Currency × Current Cross Rate) − (Amount in Target Currency)
Where:
- New Amount in Source Currency – the new transfer amount in the source currency
- Current Cross Rate – the recalculated cross-currency rate after the amount change
- Amount in Target Currency – the amount previously calculated or specified in the document
1000 * 0,22 - (1000* 0,236 (initially set course) = 16,19 * 4,23388 = 68,54
1). Before change Transfer Amount
2). After changing Transfer Amount
A Foreign exchange difference happens on the Bank account and arises due to changes in the official exchange rate between the date of initial recognition and the date of payment or revaluation. Such differences are automatically recorded in financial result accounts (Exchange Gain/Loss).
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(Previous balance before money transfer)-(Money transfer value)* Сurrent rate - (Previous AED balance - AED money transfer value)
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To verify balances in both the foreign currency and the accounting currency, as well as to ensure the correctness of exchange rate difference calculation, please use Cash Assets Balances report (Money - Reports of money - Cash Assets Balances)
Thus, the exchange rate happens when there is variance on the official rates used in the previous document when compared to current document.
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