Re: Exchange Rates

[Michael Richardson <..hidden..>]

Pongrácz István <..hidden..> wrote:
    > I assume, every country have rules, how to work with exchange rates in a
    > standard way.

No, I don't think we do.
We don't have official rates; each bank gets to give us a reasonable rate.
A *bank* transaction on a particular date might give some moderately good
reate, while if I go to a third-party FX broker, I might get an extra 0.005%.
[so $500 difference on 100,000 FX]
Meanwhile, the same banks' Credit Card might process an FX transaction
at some other (probably really crappy) rate.  All on the same day.

    > 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).

So that's the rate you put into your invoice.

I usually avoid this by either always invoicing in the customer's currency
(usually USD or EUD), or in some cases, the foreign customer wants me to
invoice in CAD, usually because they already have an account in that currency
for other reasons.

    > 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.

Yes, that's what happens, but the discussion is how that difference is
entered.  Right now, if I invoiced $100USD, and then I receive $124.80CDN,
I have figure out: 124.8 / 100 = 1.24800 and enter that.  Or did I mean
to figure out: 100 / 124.8 = 0.80128?  Can easily be confused on my part.
It wasn't so bad in the days of 1.2 when one could edit transactions
willy-nilly...

Erik's proposing that I would simply enter "124.80CDN" and let the computer
figure out the rest.

--
]               Never tell me the odds!                 | ipv6 mesh networks [
]   Michael Richardson, Sandelman Software Works        | network architect  [
]     ..hidden..  http://www.sandelman.ca/        |   ruby on rails    [


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