Inter account transfer in foreign currencies for saving

[privipol95]

Hi. I am having a problem understanding inter account transfer with different currencies. I have read other posts regarding this issue, but still can’t understand how it works.

I have USD account for saving and investment and IDR account for business purposes.

I usually do monthly transfer to my USD account, but every time I do the transfer, the amount always shows in my profit loss statement as foreign currency gain/lost, which make my profit loss statement incorrect.

Is there a way to move it to another location so it doesn’t show in my profit loss statement? Because I don’t lose or gain anything yet.

I assigned the exchange rate when I created the USD currency

And in the inter account transfer, exchange rates varies depending on when transfer was made. I’d assume the foreign currency exchange gain/lost should be calculated on the difference between the assigned exchange rate and the exchange rate used when making the inter account transfer, but it doesn’t seem to work that way.

I just need my profit loss to be correct for tax purposes. Any suggestions?
Thanks

[Abeiku]

Your illustration is not showing every side of the transaction. Kindly do a detailed illustration with a test business from the point where you enter starting exchange rate to enable forum members to determine if there should be a gain or loss. You can even do a test business and share that business here to enable us fully understand your situation. Show clearly effect on the profit or loss statement. It will be a plus to show what profit or loss statement you are expecting to see.

That said, if the exchange rate of the inter account transfer transaction differed from the existing exchange rate, there will be a gain or loss.

[Joe91]

Your USD balances are recalculated in IRD using the exchange rate on the last day of the period of the P & L report.

If this value is different than the value used when you transferred the IRD to the savings account, then you will have an un-realised gain/loss on foreign exchange. This is correctly shown on your P&L report and cannot be excluded

Ideally you would enter current exchange rates, so that the up to date value is calculated

[privipol95]

So the beginning exchange rate is 1USD=15,149IDR
I made a transfer of 100USD=1,560,000, the actual gain or loss should be IDR11,000, right?
But it shows the total amount transferred as loss

Here is the test I made:

Here is the profit loss summary shows after the transfer was created

[privipol95]

When I tried creating a new exchange rate by end of the month, the calculation of foreign exchange doesn’t make any sense. My balance in USD is only around 1k but it created a profit of IDR17million - this messes up my profit loss overall

[Mark]

@privipol95

So the beginning exchange rate is 1USD=15,149IDR

But in your other post you got the currencies switched:

Please also (re)read the corresponding guides:
Set base currency
Define foreign currencies
Use multiple currencies

[privipol95]

OMG. You are absolutely right. I screwed up my beginning exchange rate.
Thank you
Now everything looks good. So simple yet when you don’t see it, it messes up the whole report