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Choose the method by selecting "Calculate Exchange Rate Differences on Month Closing Only" in Administration > Service Settings > Money.
Calculations with Option Enabled
Revaluation of GL Accounts in Foreign Currencies: GL accounts in foreign currencies (
other than the accounting currency) such ase.g., Cash, Receivables, Payables, and Staff Settlements) are revalued at month-end using the current exchange rates.
For example, if a bank account
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has a balance of 23,000
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EUR on June 30
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with an exchange rate of 4.40 (101,200 Dirhams), and a subsequent deposit of 15,000
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EUR on July 10 at 4.42 (66,300 Dirhams),
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the new balance
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becomes 167,500 Dirhams. By July 30, with an exchange rate of 4.45, the balance is revalued to 169,100 Dirhams,
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reflecting a 1,600 Dirham gain.
For Payables and Receivables: Gains and losses for GL accounts , gains and losses in the Payables and Receivables sections 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 from the last revaluation date (either the transaction date or the previous month-end). A positive difference indicates a gain, while a negative difference indicates a loss.
- Realized gains and losses for settled transactions are calculated at month-end based on the exchange rate on the payment date.
Calculations with Option Not Enabled
Continuous Exchange Rate Differences Calculation: If the option to "Calculate Exchange Rate Differences on Month Closing Only" is not selected, exchange rate differences are calculated continuously throughout the period:
For each new foreign currency transaction, amounts are recorded in the accounting currency using the exchange rate on the transaction date. Although exchange rate differences are not calculated for documents like Invoices or Invoice Received, all related foreign currency transactions and GL account balances are revalued using the current exchange rate, and this date becomes the latest revaluation date.
For outgoing or incoming payments (e.g., Cash Receipts or Cash Payments), exchange rate differences are calculated if the rate on the payment date differs from the rate on the original transaction date. Additionally, all related transactions and GL account balances are revalued based on the payment date's exchange rate, making it the latest revaluation date for the adjusted transactions.