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Re: Exchange Rates

Hi Istvan,

Yea. I'm running into the issue myself that the CC company, the bank and PayPal each have their own idea about today's rate.


Just a note.

I assume, every country have rules, how to work with exchange rates in a standard way.

I think the general idea is and could be:

The system uses a declared exchange rate as basis, and this must be consistent. Let's say I choose the exchange rate from our Central Bank and I keep all my transactions in the book with this exchange rate. So, every transaction will use this exchange rate (AR/AP).

If the exchange rate of the bank/paypal/wire guys will be different (and it will be different), the differences must go to the exchange rate gain or loss accounts.

When I finish all of the work, your described solution can be achieved using a 2-step process:
1. Book the transaction from the bank or CC company at the rates used by them (this assures the transactions reconcile with the underlying transaction statements)
2. Run revaluation on the books to which changes the valuation from the bank to the valuation of the company, posting the valuation differences in the fx gain/loss accounts.

This way, at the time of your reporting, the books of the reporting company comply with the regulations of currency valuation of the local regulator.




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