Redenomination function

National bank of the Republic of Belarus is planning to make a redenomination on July 1, 2016.

Here is official statement

“That is, having regard to the chosen increase in the scale of the Belarusian ruble value (1:10,000), the current banknote of the lowest denomination – 100 Belarusian rubles – will be replaced by the lowest denomination of the new currency line – 1 copeck.”

Can I ask to write some function for BYR for making redenomination automatically? We have a lot of transaction in BYR.

To be honest, I’m not sure what would be the best way to handle this without starting new accounting file.

Of course, there is API which would allow you to simply read all data and divide all amounts by 10,000 but I don’t like the fact it would retrospectively change all your records (including invoices which should be preserved the way they’ve been issued).

So why not start new accounting file from 1 July 2016. You still keep your old accounting file for historical records.

Your solution looks not bad, but it’s not enough in our case. I will try to explain. In our case we have hundred invoices in BYR. People have a chance to pay a half in one month, another half in next month.

Let assume that we have invoice for 2 000 000 BYR. On June (before redenomination) we received 1 000 000 BYR, on July we received 100 BYR (after redenomination). Total sum is 1 001 000. But according to plan (according to invoice) should be 2 000 000 BYR. Here is a problem. We need to standardize everything. To my mind the best option in our case is to divide all BYR transaction by 10,000 .

@koval, I don’t think you should be performing calculations on previous transactions. From an accounting perspective, the redenominated money is like a separate currency. You should preserve your prior transactions, not adjust them, because people will easily forget what was done.

I think you have two alternatives:

  1. Create a new, redenominated currency with appropriate exchange rates.

  2. Start a new accounting file. Yes, this will entail quite a bit of work, but it will be clean moving into the future.

Whatever you do, you will be living with the effects of this action for years to come. I suggest inquiring with other local business people to see how they are handling it. Perhaps a local accountant will have recommendations, as well. After all, every business in your country will fact the same problems. Contracts, payment schedules, leases, employment agreements, etc., will all be affected. You should think about how you can best fit in with what others are doing. That will make your actions easier for both customers and suppliers to understand.

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I’m actually planning to implement ability to purge historical data. This means you can take your existing file and say I want to purge all transactions before certain date. Manager will then remove those transactions and establish new starting balances to account for purged transactions so closing balances remain intact.

Then all starting balances would need to be divided by 10,000 but this can be done manually.

I think this is the best solution in terms of time and moving forward.

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