Some guidance for foreign currency balance sheet accounts please

I think I begin to realise that I have not fully utilised Manager’s ability here.

I have several “Balance Sheet Account Groups” which contains separate accounts in various foreign currencies. Typical examples are;

  • “Investment in Subsidiaries”, where I have the share capital held in foreign subsidiaries (in the original currency)

  • “Inter company balances”, where I keep debts or credits from “related companies” (which may be in various currencies)

I now realise that unlike “Bank Accounts”, “Accounts Receivables” and “Accounts payables” the individual records in the accounts mentioned above are converted to base currency at the time of transaction only (which is logical and understandable). However this will lead to extra work when reconciliation needs to be done (like e.g. balancing all inter company accounts at the end of financial year.)

I assume a better way would have been to set these up as “Special Accounts” rather than ordinary balance sheet accounts…?

Is there someone out there that can provide a short guide for how these special accounts (and the associated “control accounts”) are best used in this scenario. In my balance sheet I eventually want to see a “group” called e.g. “Inter company balances”, with sub accounts/lines for each company. (Please note that there may be postings in various currencies for the same company).


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Using Special Accounts instead of ordinary accounts will make absolutely no difference with regards to the converted to base currency at the time of the transaction and the lead to extra work when reconciliation needs to be done.

All that the Special Accounts and the associated control accounts will do is “group” the previous individually listed company balance sheet accounts into a single balance sheet account with sub-accounts - but still in base currency only.

Any company regardless of how it is setup can only have their transactions displayed in one currency only.

If you can explain what type of transactions can occur between these companies - only cash transfers or includes trading invoices - then a work around solution could (?) be available.

Oh, then I must have misread some earlier postings.

I believe I read somewhere in this Forum that you could define Special Accounts in any currency of your choice…? Is that a missunderstanding?

I thought that if that would have been the case, such accounts would be the subject to the “automated” exchange rate adjustments over time, just like foreign bank account, foreign account payable or receivable…

So then, just to confirm my understanding: Is it only the above three account types that are analysed by the exchange rate updates…? There is no way to define other balance sheet accounts to be treated as “foreign currency” and managed by the “forex algorithm”…?

Special accounts can be defined in any currency, as long as you first have a base currency set. When you define one, you are simply establishing a subsidiary ledger under a control account. Read this Guide:

The complete list of where you can denominate different currencies is here:

There are no automated exchange rate adjustments. New rates must be entered manually under Settings. Bank accounts are affected because they are in a designated currency. Accounts receivable/payable are affected because the underlying subsidiary ledgers (customers and suppliers) are denominated in specific currencies, so the relevant invoices that contribute to account balances are in different currencies.

See the first Guide I linked to above.

Tut: Many thanks. Especially the first guide you referred to should be very useful. I did some basic test, and it seems like you can indeed define a Special Account in any currency of your choice, right…?

So If I create a “Control Account” which I e.g. call “Intercompany Balances”, I can thereunder have separate Special Accounts for individual subsidiaries (or sister companies), each of which may be in different currencies. From there on, the “Control Account” (which will obviously be in my base currency) will always be subject to the exchange rates I define under “settings/exchange rates” in the same way as the default “Bank Accounts”, “Accounts Receivables” and “Accounts Payable” accounts.

Is this correct…? If so, that is exactly what I wanted…! :slight_smile:

I don’t have time to simulate what you describe, but it sounds right.