Currency gain/loss

1

I have a currency gain/loss that is causing me some confusion. My set up is as follows:

  1. UK company, base currency GBP
  2. 2 bank accounts, one GBP one USD
  3. Client invoiced $10,000 USD (not actual amount but for this example)
  4. Client pays $10,000 USD into USD bank account’

Scenario One

The next transaction (on the next day) in the USD bank account (immediately after being paid) is:

  • Spending money, $10,000 to a ‘Currency conversion’ asset

Then a currency gain/loss is generated for the date of the money is spent on the ‘Currency conversion’ asset.

Scenario Two

The next two transactions (on the next day) in the USD bank account (immediately after being paid) is:

  • Spend anything, so lets say $0.01 to anything, so lets say ‘Software’
  • Spending money, $10,000 to a ‘Currency conversion’ asset

Then no currency gain/loss is generated (for either the $0.01 or the $10,000 spend).

Questions

  • Is this a bug?
  • What should happen (should there be a currency gain/loss or not)?
2

I just created a fresh example of this on a new account.

Exchange rates

USD bank account (with two transaction)

P&L for the above (notice the currency gains/losses)

USD bank account (with three transaction)

P&L for the above (no currency gains/losses)

3

Someone else has reported this bug too. It will be fixed within a few days.

What’s happening is that currency gains / losses are being recalculated only once the bank account reaches zero balance instead of gains/losses being recalculated on each day new exchange rates are entered.

4

It has been said before on this forum quite a few times; but once again; the response times are amazing. Thanks for the answer.

So to confirm, every day an exchange rate change is entered, should all non native bank accounts generate a currency gain/loss based on the balance?

A follow on question is does it matter how often the exchange rate is entered? What I mean by this is we manually enter the rate when we add an invoice in a non native currency, and also when we receive money in a non native currency. This allows us to ensure invoices are fully paid (invoices are in non native currency too) and also means our currency gains/losses are accurate for each invoice. However, of course, the exchange rate changes every day, so should we put in exchange rate changes every day (good practice? legal requirement?) or are we okay just to enter them when we ‘need’ them (i.e. to make sure invoices are fully paid etc.)

Thanks again.

5

Sorry if i am reviving a dead Topic. But mine is now showing Currency Profit/Gain in my bank Statements when viewed through the “SUMMARY” tab, although i only use one rate because the currency here is pegged. And i believe the reason for this is that my bank account that holds a different currency than USD (base currency) is showing the balance in USD rather than in its own currency and so Manager is compensating the difference of 0.001 in either a gain or loss of 0.01. Why would Manager show me the balance of the currency in the base currency only? Is it not better to show both? Also one more question, if i were to use two different rates, one for when using cash and one for when using bank transfer is there a way to do this?

6

Summary tab shows currently all amounts in base currency only. I’m planning to address this so amount in both currencies will be shown for foreign currency accounts.

Not sure what you mean by using different exchange rate on transfers. What have tried to far? Can you show screenshot?

7

No i have not tried it yet. But i get a preferred rate at the bank, example the bank offers me a rate of 1.202 to buy the currency. But when i pay my supplier or my expenses by cash &/or transfer i use the normal rate of 1.200 or 1.201.
Just to explain more. Lets say i have a purchase invoice for 100 usd but that i am going to pay in local currency. The bank would exchange 100USD at the rate 1.202 so it will be 120.2 X. Then i will pay the invoice at the rate of 1.200 so it would be 120, i would then have a .20 gain.
I know such a thing is not a priority but it is something widely used, especially in commodities (i dont know about other industries), so its a good thing to consider it.

8

Manager can handle it. Simply go to Bank accounts tab to spend money. Allocate the money spent to sales invoice. If sales invoice is in different currency than the bank account, you will need to enter two amounts. One in the currency of your bank, then the equivalent currency amount for sales invoice. Manager will handle the rest (as far as calculation of currency gains/losses goes)

9

Thats great, i will try it out! Thanks a lot.