The Book-keepers Forum (BKF)
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Multi currency assests
Post Info TOPIC: Multi currency assests
HCJC


Newbie

Status: Offline
Posts: 3
Date:
Multi currency assests
Permalink  

Good morning all, I have recently started doing the bookkeeping for a company that has two assets in particular that are causing me problems. One asset is in EUR, the other is USD. Both assets share a common supplier who will only invoice in EUR or GBP. All payments are subsequently made in EUR or GBP.

When adding the invoices relating to the USD asset, I convert them to USD to add them to the ledger, however, these were paid in EUR or GBP, so how do I pay them off on the USD account without throwing the bank account balances out? The obvious solution would be to physically convert the currency from USD to EUR/GBP, and account for any currency adjustments but the business owners do not want to do this because of the charges incurred, so it now looks like I have outstanding dollar invoices on the USD asset, when these have in fact been settled.

Any help anyone could offer would be gratefully received as I am new to this way of working and hate the accounts looking incorrect.



__________________
Truemanbrown


Senior Member

Status: Offline
Posts: 205
Date:
Permalink  

I am assuming that the client's accounting records are maintained in £ Sterling.

Whenever, you receive an invoice in any foreign currency you would post the sterling value of the invoice using that day's exchange rate.

Whenever, you make a payment in any foreign currency you would post the sterling value of the invoice using that day's exchange rate.

On the supplier account, you would net off the invoice against the payment and any difference would be written off to the P&L under 'Exchange Rate Differences'. At the year end, if there are any outstanding balances, you would use re-calculate the sterling value using the exchange rate on the balance sheet and the difference written off to 'Exchange Rate Differences'.

With regards to a foreign currency bank account, at the year you would convert foreign currency balance to sterling using the balance sheet exchange rate and write off any difference to 'Exchange Rate Differences'.

__________________

Your local accountant

 

 
Page 1 of 1  sorted by
 
Quick Reply

Please log in to post quick replies.
The Book-keepers Forum (UK) -> General Book-keeping & Accounting -> Multi currency assests
Tweet this page Post to Digg Post to Del.icio.us
Members Login
Username 
 
Password 
    Remember Me  
©2007-2024 The Book-keepers Forum (BKF). All Rights Reserved. The Book-keepers Forum (BKF) is a trading division of Bookcert Ltd. Registered in England Company Number 05782923. 2 Laurel House, 1 Station Rd, Worle, Weston-super-Mare, North Somerset, BS22 6AR, United Kingdom. The Book-keepers Forum and BKF are trademarks of Bookcert Ltd. This forum is a discussion forum only. There will usually be more than one opinion to any question and any posting should not be viewed as a definitive solution. No responsibility for loss occasioned to any person acting or refraining from action as a result of any posting on this site is accepted by the contributors or The Book-keepers Forum. In all cases, appropriate professional advice should be sought before making a decision. We reserve the right to remove any postings which are offensive, libellous, self-promoting or engaged in covert marketing. We will not notify users of removals. The views expressed in the forum posts are those of the individual and do not necessary reflect or agree with those of The Book-keepers Forum. Any offensive or unsuitable posts will be removed by the moderators. Any reader of this forum can request for a post to be looked into by sending an email to: bookcertltd@gmail.com.

Privacy & Cookie Policy  About