Currently, we can only set exchange rate based on based currency. For example, I’ve set MMK as based currency. We can set only as below -
1MMK = … SGD
1MMK = … USD
Most exchange rates define like 1USD = … SGD; 1USD = … MMK, meaning that they describe more valuable currency at the left side of equation. As a result, the calculation is more definite.
It would be great if we can choose the currencies on the both side of exchange rate equation. That would help a lot.
Thanks.
Both representations are mathematically equivalent. In my experience, the order of presentation seems to have more to do with the geographical origin of the quote than the relative value of the monetary units. Sometimes, it depends on whether the quote is for buying or selling, too.
according to me there should be two exchange rates in settings
1- to receive foreign currency
2- to spend foreign currency
because buying and selling price of USD is different in any country. in this way we cannot see currency gain or loss.
because in my case
1 USD = 3.67AED (receiving money from foreign company)
1 USD = 3.674AED (sending money to foreign company)
when we have separate exchange rates then we wont get currency gain/loss.
Generally exchnge ates will keep on fluctuating daily, but in UAE most of the time its same.
once users enter these two values as mentioned above in the exchange rates in settings menu
then while spending money if the bank gives different exchange rate at that point of transaction
Ex: 1USD= 3.675 AED , then that difference in rate 0.001AED will be calculated as currency loss.
Ex2: 1USD= 3.672 AED, then that difference in rate 0.002AED will be calculated as currency gain.
Same will be applied for receiving money
So, basically we need two exchange rates entries one for receiving money and other for spending money
that’s just my idea, i might be wrong. I’m not pro in accounting 