Dear All; we had transaction for last 4 years in IQD where the rates was fixed 1USD =1200 IQD, this year government change the exchange rate to be 1UD=1470 IQD.
creating new reference point with new exchange rate bring big amount of losses in exchange rate.
for us we see this as virtual losses, since all transactions are cleared at time of exchange rates, and new transactions is clearing on new rates, so on ground no losses or gain in the exchange rates.
what is best practice to write off such difference ?
but actually the invoice amount before 1 jan 2021, was collected in IQD and exchanged to USD with the same rate that time,
while in manager it consider we still have the IQD amount as of 1 Jan 2021, and due to change in exchange rate, we are losing huge amount.
this is what am looking for way to write off ( if un avoidable) since it impact the lifetime business summery and P&L
You still have not shown enough to illustrate your situation. You would need to show Edit screens for the sales invoice(s), customer(s), and receipts(s) involved. However, you also need to understand that when your financial statements are stated in a base currency and you also conduct operations in foreign currencies, foreign exchange gains/losses are inevitable and real (in terms of your base currency). You cannot wave a magic wand and cause them to vanish or your books will be unbalanced.
