The latest version (23.7.13) is adding new tab named Currency Revaluations
The purpose of this tab is to be able to debit or credit foreign currency accounts in base currencies without affecting their foreign currency balances.
In previous versions, multi-currency revaluations have been done automatically. While convenient, this was causing numerous issues.
The new approach to handle currency revaluations through what I’d call a “Worksheet method”.
The “Worksheet method” will calculate the figures on demand which can be then copied onto New Currency Revaluation transaction. So you are in control when revaluation is done and what figures are going into your ledger. Most businesses would do it only once a year or once a quarter. Depending on reporting requirements.
The worksheet is named Foreign Currency Revaluation Worksheet and it’s under Reports tab.
This worksheet will calculate both realized and unrealized gains across all your foreign currency accounts.
There are 5 columns
- Foreign Balance (this is sum of all transactions in foreign currency)
- Exchange Rate (this is exchange rate defined on the report for the purpose of revaluation)
- Adjusted Balance (this is
Foreign Balancemultiplied or divided by exchange rate) - Current Balance (this is sum of all transactions in base currency)
- New Currency Revaluation (this is a difference between adjusted and current balance which is your currency gain / loss)
The report has also section on realized currency gains (losses) which calculates how much of those gains and losses are realized per foreign currency. The figure is not clickable yet but I’ll make it so it’s easy to see how it’s calculated. The the final total on the report is your unrealized currency gain (loss).
The results can be copied to New Currency Revaluation transaction using the button within the report.
So in nutshell, I’m taking away ability to have foreign exchange gains and losses fully automated but in exchange I’m delivering ability to calculate both realized and unrealized foreign exchange gains and losses.
There are more benefits to worksheet method.
Since Manager is not automatically inserting entries into your profit & loss statement, you are now in control how and when currency revaluations are done. Or even what accounts you do want to revaluate. This will make drilling-down into your ledger accounts more straightforward and easier to understand.
Another benefit is that if you are doing adjustments to past transactions, these adjustments won’t have side effect that will cause your currency gains and losses figures changing automatically unless you run the worksheet again to pick up those changes.
Currently, both automatic and “worksheet” method are working in Manager side-by-side. Automatic recalculation will be disabled when you create the first currency revaluation. Eventually I will remove automatic recalculation module and worksheet method will be the only way forward. But for now, I’m keeping both methods in the system so this inclusion doesn’t break anything for existing businesses while we keep improving the worksheet method.
