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Choose the method by selecting "Calculate Exchange Rate Differences on Month Closing Only" in Administration > Service Settings
Calculations
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with Option Enabled
Revaluation of Foreign Currency GL Accounts
At the end of each month, general ledger (GL) accounts in foreign currencies—such as Cash, Receivables, Payables, and Staff Settlements
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—are revalued
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using the
...
latest exchange rates.For example
Example:
- On June 30, a bank account
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- has 23,000
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- EUR, with an exchange rate of 4.40
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- , making it 101,200 Dirhams
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- .
- On July 10,
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- a
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- deposit of 15,000
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- EUR is made at an exchange rate of 4.42
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- , increasing the balance to 167,500 Dirhams.
- By July 30,
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- the exchange rate
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- changes to 4.45, so the balance is revalued to 169,100 Dirhams,
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- resulting in a 1,600 Dirham gain.
Revaluation of Payables and Receivables
For Payables and Receivables
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, gains and losses are
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calculated for each document:
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- The document amount is revalued using the month-end exchange rate.
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- This new value is compared with its value from the last revaluation (either the original transaction date or the previous month
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- 's).
- If the value increases, it's a gain.
- If it decreases, it's a loss.
For settled transactions, the final gain or loss is determined at month-end using the exchange rate
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on the payment date.
Calculations
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with Option Not Enabled
When the option is not enabled-If the "Calculate Exchange Rate Differences on Month Closing Only" option is not selectedenabled, exchange rate differences are calculated continuously throughout the period as follows:
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.
Each time a new foreign currency transaction occurs,
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its value is recorded in the accounting currency using the exchange rate
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applicable on the transaction date. While exchange rate differences are not
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computed for documents
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such as Invoices or Invoice Received, all
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associated foreign currency transactions and general ledger (GL) account balances are revalued
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using the
...
most recent exchange rate,
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updating the latest revaluation date
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accordingly.
For
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payments (e.g., Cash Receipts or Cash Payments), exchange rate differences are
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determined if the exchange rate on the payment date differs from that of the original transaction date. Additionally, all
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linked transactions and GL account balances are revalued
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based on the exchange rate on the payment date
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, which then becomes the new revaluation date for the
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affected transactions.
Thanks for being a first-bit customer! #exchange rate difference #short explanation #Revaluation