Fixing year-end exchange rates

Question asked by Alex Redmond 10 years ago

I am working on accounts at 30 November 2014. I need to translate the bank balances to GBP at my client's official rate. So I need to fix the exchange rate and revalue the bank accounts at that rate.

If I use the revaluation tool, I can't see what rate CB is using.

I tried the following:

  • I set the exchange rate in the multicurrency section (settings)
  • I revalued the bank account at 30 November 2014

But the result was not what I expected.

What am I doing wrong?

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6 Replies

Hello Alex,

When looking at a test account with test invoices and bank balances, there is no issue in regards to the FX rate being different.

I have remade the situation based on the fact that 2 bank accounts had the same value and the same revaluation date. The second scenario was where the bank balances were greatly different but again, the same bank revaluation date and accounting date led to the same FX rate.

Please can you give an example on your account which one is in accurate based on the banking date and the bank accounts chosen. I feel that the accounting date is not the same on some of your older invoices which could be the reason why this is happening.

Vanish

Best answer
10 years ago

Hi,

I'm having this same problem, on the Clear Books bank account for my Australian Dollar account the amount is correct, but in my trial balance for end of 2017 the amount is wrong by £677, so we have added that amount as a year end adjustment, but now the amount in the Clear Books currency account doesn't match what I have in my actual bank account.

Can anyone advise on what's happening?

Thanks, Lucy

7 years ago

Hi Vanish, I have been testing this out with a different client. There is a euro account that is fully reconciled (in euros) but the balance sheet balance (in £) needs to be adjusted by £113.56 on 31/08/2014. If I transfer this amount from the contra account to the euro account, and then process the journal, the balance sheet in £ will be ok but the euro balance on the bank statement will be wrong. So I need to adjust the euro account again (on 1 Sept?) to get the euro balance right. Or what am I missing?

Do you have a worked example?

Thanks

10 years ago

Thanks Vanish, I will have a look...

10 years ago

Thanks. The trouble is that this will confuse my client as the balance in € will not match the bank statement. I also noticed that the 2 euro accounts I am working with have balances in £ on 30 Nov 2013 (effectively the opening for this year), which are converted at different exchange rates from each other. Do you know how this could have arisen?

10 years ago

Hello Alex,

The rate used by Clear Books is based on XE.com's mid-day rate.

You can use the guide below to use your own FX rates so you know the rates used and to get the desired balance.

https://www.clearbooks.co.uk/support/guides/journals/multicurrency-journals

This is a workaround and requires you to choose your own FX rate by converting the foreign currency to the UK equivalent. Again, although this is a longer method, this will allow you to set your own rate as well as have it revalued at 30th November 2014.

Eg $150 is the current balance but you need $125. So you will transfer $25 with an example rate of 1.4 equating £17.87.

I would recommend you use the Clear Books demo account to test this out.

Vanish

10 years ago

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