There seems to be a glitch in the G/L transaction report. The foreign currency accounts are not tying out to the general ledger summary and the trial balances. I have a USD reporting currency and those amounts are fine but the EUR and AUD accounts are generating amounts that don’t tie to either of the G/L summary or the trial balance. I’ve never had issues before, any ideas? Thanks!
It would help to show screen images of what you say as it is difficult to imagine exactly what you mean
As background, our functional currency is USD and we have foreign currency accounts in AUD and EUR. As our holdings are based in the Netherlands, we use the ECB (European Central Bank) foreign exchange rates.
We were sending some reports to an outside advisor when this came to light. Seems that its new as we’ve never had this problem before (user since 2016).
I’m using a euro intercompany account as an example;
Attached screen shot of the euro balance as of yesterday (30 June) EUR 152,909,64 – BALANCE IS CORRECT
Attached PDF of the USD General Ledger summary balance as of yesterday (30 June) USD 171,228.14 – BALANCE IS CORRECT
Attached screen shot of the of the General Ledger Transactions summary USD 164,358.13 – no idea where these amounts (rates) are coming from and why it doesn’t tie out to the G/L summary
As we have a 30 June year end, it’s a bit urgent so thanks for your help!
(Attachment 200630 Vesta Funding B.V. - General Ledger Summary - Vesta Financial B.V…pdf is missing)
You should not publish your personal details - I would delete them
I will use the terminology as used in Manager
Presumably you have setup your base currency as USD
When you enter transactions in the Euro accounts they are translated into USD amounts using the exchange rate that is active on the day of the transaction or if you enter the EUR and USD amounts using the implied rate
When you report your balance sheet accounts, the Euro balances are converted using the exchange rate active on the Balance Sheet date
What exchange rates have you entered for EUR/USD
The G/L Transactions report does not include the Foreign Exchange Gains/Losses on the revalued B/S accounts whereas the G/L Summary Report does
Transactions may also have a FX gain/loss if the converted total of the lines on the transaction does not equal the converted total of the transaction.
If the transaction only has one line, then this will not happen
The EUR/USD entered rate is 1.1198 at 30 June 2020 so the balance in the General ledger summary is correct.
I think that the FX Gain/loss is calculated when the reports/or summary screen is shown so do not give rise to explicit transactions in the ledgers
I see what’s happened, you’ve changed the way the forex is calculating! It now calculates once on the date of the transaction and does not keep updating that transaction when a later exchange rate is added (as it previously did). This is excellent for the historic purposes but it doesn’t properly reflect closing value. If you can set up a system where the user can schedule a foreign currency calculation on a specific date so the balance recalculates on that date, the problem would be solved.
I’ve attached the 2016 general transaction report (removing all personal info) from another software system showing the transaction currency and amount (in the currency) on the right and the functional currency (USD) translated amounts to the left. The user can generate an automatic foreign currency calculation on whatever date they wish (in the this case 31 December and 30 June so the G/L transaction report agrees to the trial balance as of whatever date the user requires. This report also shows the balances in the foreign and functional currency which provides the audit trail most companies need.
(Attachment General Ledger EUR account in a USD reporting currency.pdf is missing)