Revalue Customer in Foreign Currency

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This topic require you to have fairly good accounting knowledge. You may want to seek your accountant for assistance.

 

Revaluation of foreign currency only affects the unpaid balances of the customers' accounts.

For example a customer owed your company US1,000.00 in March this year and was book into the account @ 1.300 or SGD1,300.00.

If this amount remains unpaid in April this year and the rate falls to 1.2000, the same USD1,000 will be worth (or equivalent) SGD1,200.00

Similarly, if the rate rises to 1.3200, the same USD1,000 will be worth SGD1,320.00.

 

To report the debt (owing to the company) in the Balance Sheet, the debt must be translated to the base currency based on the exchange rate in the month that you are reporting your financial statement.

So if you are reporting your Balance Sheet in April, you must report the debt as SGD1,200.00( x'rate @ 1.2000) or SGD1,320.00 (x'rate @ 1.320).
The difference will go to unrealised gain and loss accounts in the Profit and Loss Statement.

 

 

It has the effect of reducing the sales from SGD1,300.00 to SGD1,200.00 so that the sales will not be overstated (if the rate falls from 1.3000 to 1.2000)

Likewise, it has the effect of increasing the sales from SGD1,300.00 to SGD1,320 so that the sales will not be understated (if the rate increase from 1.3000 to 1.320)

 

: Revalue customer,supplier and general ledger in foreign currency

 


 
To auto-generate unrealised exchange gain / loss in Customers’ foreign currency account

 

For Financial reporting purposes, all foreign currency transactions need to be revalued

 

 

Assuming the month end rate of USD as at April 2020 is 1.3800. Check you currency rate table

 

Step 1: Set all foreign currency rates as at month end        

 

 

 

Step 2: Click [A/C Entry] --> [Revalue Accounts] --> [Add] ,

 

 

 

 

 

 

 

 

System will take closing rate of all currencies as at 30/04/2020 set out in the currency rate setting table

(Take note the Ref No# is sharing the reference number of Journal Posting)

 

 

Next, go to the Topic: Revalue Supplier in foreign currency

 

 


Related Topics

Preset Unrealised Gain/Loss in Company Profile - Account Settings

 

Exchange Gain / Loss account in Chart of Accounts

 

FAQ Can I revalue only at the end of the year? Yes

 

Customer Aging

 

 

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