There’s an urgent problem.
I noticed I could add an exchange rate within a date before the lock date.
That’s going to cause a lot of trouble changing the profit and loss figures.
I would also like to ask the question of whether it is a technical problem or misuse of mm before the user
The question is: the batch can be updated and data modified before the lock date, you have tried it and the process has been successful
Isn’t that a mistake?
By definition, exchange rates aren’t transactions, they’re environmental variables. So lock dates shouldn’t affect exchange rates.
And yes, your profit and loss will change if you enter an exchange rate for a locked period.
Also, even if the period was locked before you updated your exchange rates, this means that your financial – and possibly tax – books aren’t measured correctly.
So in case you don’t want a locked period to be remeasured any differently, then your only solution is to make sure that exchange rates are updated before locking the period because otherwise you will be stuck with wrong currency conversions indefinitely.
That’s not a solution, in my view.
I think the lock date should include exchange rate inputs. Because the purpose of the lock date is to preserve the financial books before the lock date and ensure that they are not compromised or change the final figures for them.
I hope that the idea is clear and taken into considerations of the developer
Ok. That means you are willing to settle for wrong exchange rates in locked periods, right?
If so then you should stop entering exchange rates for locked periods.
How am I going to guarantee that if the lock doesn’t include this feature?
You can check your lock date before creating a new exchange rate.
Let us assume that you give a 0-interest business a loan for 1 year of 1,000 in currency X while your default currency is Y at an exchange rate of 1X = 420Y resulting in 420,000Y. Each month the currency exchange rate changes and we nicely enter that in Manager. By the end of the year the loan needs to be paid back at that day the exchange rate is 1X=450,000Y. The business will have to spend 30,000Y more to repay me 1,000X and in Manager that would be automatically appear as -30,000 in the Foreign exchange gains (losses) account in P&L. All these monthly entries have no real purpose except at that stage one would know the gains/losses made due to the Forex used. There are numerous websites that can give historical exchange rates data, if we ever need to know or revert to see what happens.
As @Ealfardan mentioned the transactions value will be affected but only at the foreign currency levels not at the default currency so no harm would be done to the tax accounting and transactions themselves. As such the exchange rates entries should not be locked because they actually should present the current gains/losses if one would need to use forex to buy the same, get investment, loans and borrow. Manager elegantly makes these gains and losses transparent in the P&L.
So in short: Exchange Rates should not be part of the lock date function of accounts because it does not affect any of the value of the transactions in the default currency and any gains / losses due to the exchange rates are transparently provided in the P&L statement.
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Don’t forget there’s sales and purchases in foreign currencies, and the manager will convert those numbers into functional currency.
That’s something you didn’t mention in your examples.
I have a lot of sales and purchases in foreign currency, and any change in the exchange rate even at any date will make significant changes in the income list
Now I better understand your problem. It turns out that it is not a lock date issue after all, it’s just how receivables are remeasured.
As long as you have foreign currency outstanding balances, they will be constantly converted at the current rate and the conversion difference will appear in the P&L as unrealized foreign exchange gains/(losses).
This is mandated by accounting standards or GAAP and there’s nothing that any one of us can do about it.
If you want unchanged exchange rates then you should fill the amounts in the line items on the payment slip related to the foreign currency invoice. The invoice itself is always in foreign currency. When making the payment or recording the receipt against the invoice you can indicate the value in both currencies. In such case it will be locked at this exchange rate because it is a financial transaction (payment / receipt amounts).
In below example I make the payment of an invoice of EUR 1,500 and indicated the US$ value of today $1700,54 (based on $1 = EUR0.88), In reality I entered the formula 1500*(1/0,88) in the field but it translates to the dollar amount given.
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