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:

1. For Each Transaction and at Month-End: Calculations are done for every transaction and again at month-end.
2. 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

Calculations 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—are revalued using the latest exchange rates.

Example:

• On June 30, a bank account has 23,000 EUR, with an exchange rate of 4.40, making it 101,200 Dirhams.
• On July 10, a deposit of 15,000 EUR is made at an exchange rate of 4.42, increasing the balance to 167,500 Dirhams.
• By July 30, the exchange rate changes to 4.45, so the balance is revalued to 169,100 Dirhams, resulting in a 1,600 Dirham gain.

Revaluation of Payables and Receivables

For Payables and Receivables, gains and losses are calculated for each document:

1. The document amount is revalued using the month-end exchange rate.
2. This new value is compared with its value from the last revaluation (either the original transaction date or the previous month'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 on the payment date.

Calculations with Option Not Enabled

When the option "Calculate Exchange Rate Differences on Month Closing Only" is not enabled, exchange rate differences are calculated continuously throughout the period.

Each time a new foreign currency transaction occurs, its value is recorded in the accounting currency using the exchange rate applicable on the transaction date. While exchange rate differences are not computed for documents such as Invoices or Invoice Received, all associated foreign currency transactions and general ledger (GL) account balances are revalued using the most recent exchange rate, updating the latest revaluation date accordingly.

For payments (e.g., Cash Receipts or Cash Payments), exchange rate differences are determined if the exchange rate on the payment date differs from that of the original transaction date. Additionally, all linked transactions and GL account balances are revalued based on the exchange rate on the payment date, which then becomes the new revaluation date for the affected transactions.

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