Your books are kept in your home currency. When you buy from a supplier who invoices in US dollars, SeroBooks records the bill at its converted value and also remembers the amount the supplier actually invoiced and the rate used. Exchange rates then move, so two questions follow:
- What happens when I pay it? If you pay at a different rate, the difference is a realised exchange gain or loss, and SeroBooks posts it for you.
- What is it worth today? At a period end, open foreign balances can be restated at the current rate. The difference is an unrealised gain or loss, and you record it with a home currency adjustment.
The Foreign Currency screen shows both sides: what is still owed in each currency, in the currency itself and in your home currency, and what a revaluation at today's rate would come to.
Opening the screen
- Company ▸ Manage Currency ▸ Home Currency Adjustment
- Edit ▸ Preferences… ▸ Multiple Currencies ▸ Home Currency Adjustment
The screen is titled Foreign Currency, subtitled Open balances in the currency they were invoiced in, with a Refresh button. If some of your documents could not be posted to the ledger, a banner at the top says so.
The Currency list
The first card is the Currency List: your home currency, the foreign currencies you have turned on, today's rate for each and where it came from, with Turn on a currency, Rates and Turn off.
1 · What is owed, by currency
One line per currency with open foreign documents:
| Item | Meaning |
|---|---|
| Currency code | For example USD. |
| Documents | N open documents, and one or more settlements had to be inferred when a payment's foreign amount was not recorded (see Estimated figures). |
| Foreign amount | What is still due, in that currency, for example 12,400.00 USD. |
| Home amount | What your books carry for it, in your home currency. |
2 · If these were revalued today
This card previews a revaluation. For each currency it takes what is still due in that currency, multiplies it by today's rate, and compares the result with what your books carry. The rate is the Bank of Canada rate, the source CRA itself points to.
A currency appears on two lines when you both owe money in it (bills, on Accounts Payable) and are owed money in it (invoices, on Accounts Receivable), because those are separate balances on separate accounts and are revalued separately.
Each line shows:
| Item | Meaning |
|---|---|
| Currency code | The currency. |
| carried at amount · today rate | What your books carry now, and today's rate. |
| Revalued amount | What the same foreign balance is worth at today's rate, in your home currency. |
| Adjustment | Revalued amount less carried amount, with a + or − sign, in green when positive and red when negative. |
How to read the adjustment:
| Balance | Adjustment is + | Adjustment is − |
|---|---|---|
| What you owe (Accounts Payable) | The debt grew in home terms: an unrealised loss. | The debt shrank: an unrealised gain. |
| What you are owed (Accounts Receivable) | The amount owed to you grew: an unrealised gain. | It shrank: an unrealised loss. |
A line reading No closing rate for XYZ. Nothing was revalued. means no rate was available for that currency.
Nothing on this card is posted. The note says so: write the journal when you close the period, and reverse it on the first day of the next one.
3 · Every open foreign document
A table of each open document with a foreign face value:
| Column | Meaning |
|---|---|
| Reference | The document's number or the vendor's reference. |
| Party | The customer or vendor. |
| Date | The document's date. |
| Cur | Its currency. |
| Invoiced | The face value, in the foreign currency. |
| Rate | The rate it is carried at. |
| Still owed | What remains due, in the foreign currency. Amber when estimated. |
| Carried at | What remains due, in your home currency, as your books carry it. |
Click a column heading to sort. The toolbar has Email and Export buttons, useful when you check a supplier's statement: their statement is in their currency, and the Still owed column is the figure to compare. If there is nothing open, the table says Nothing open in another currency.
A bill gets a foreign face value when Invoiced in another currency is used on it. A bill entered only in your home currency has no foreign balance and belongs in the ordinary aging reports.
Estimated figures
A figure in amber had part of its settlement inferred: a payment was recorded against the document without saying what it came to in the foreign currency, so it was converted at the rate the document is carried at. It is the best available reading, and the one most likely not to match the supplier's statement.
Record a home currency adjustment
SeroBooks does not post the revaluation for you; you record it as a general journal entry, so a person decides and checks it.
- On the Foreign Currency screen, note each line's adjustment and whether it is a gain or a loss.
- Open Company ▸ Make General Journal Entries… and date the entry on the last day of the period.
- In Currency, choose the foreign currency, then tick Home currency adjustment — amounts in home currency; moves only the home value of USD balances. The rate box is disabled: the amounts you type are already in your home currency.
- Enter the adjustment. For a payable that grew (a loss): debit Exchange Gain or Loss and credit Accounts Payable, with the vendor in the NAME column. For a receivable that grew (a gain): debit Accounts Receivable, with the customer in the NAME column, and credit Exchange Gain or Loss. Reverse the sides for the opposite cases.
- Tick Reverse this automatically on the first of next month, so the adjustment undoes itself at the start of the next period and the next revaluation starts clean.
- Save.
A home currency adjustment moves only the home-currency value of that currency's balances; the amount owed in the foreign currency does not change. See Make General Journal Entries.
Realised gains and losses: what posts when you pay
When you pay a foreign bill in Pay Bills and record what the payment came to in the vendor's currency, SeroBooks posts three lines instead of two:
- Accounts Payable is relieved at the amount the bill was carried at;
- the bank account is credited with the home-currency amount that actually left it;
- the difference goes to Exchange Gain or Loss — a loss when more home currency left than the bill was carried at, a gain when less did.
The account used is the Foreign exchange gain/loss on currency conversion row in Accounting Setup. It is set for you the first time a foreign currency is used: an existing account named like "Exchange Gain or Loss" or "Foreign Exchange…" is adopted, or Exchange Gain or Loss is created. If the row is empty, the gain or loss cannot be recognised and the payment posts at its home amount only; map the row and re-post the payment's dates.
Reports
Reports ▸ Company & Financial:
- Realized Gains & Losses — exchange gains and losses on foreign documents settled in a period.
- Unrealized Gains & Losses — open foreign invoices and bills marked to the rate on a date.
See Company & Financial reports.
Permissions
The Foreign Currency screen needs access to Foreign Currency under Accounting. Recording the adjustment needs the right to create general journal entries.
Common problems
- "This server has not been migrated for foreign-currency bills yet." Foreign face values are not available for your company yet, so a foreign bill records only the converted amount.
- "No open foreign-currency documents." No open bill or invoice has a foreign face value. Use Invoiced in another currency when you enter a foreign bill.
- A supplier's statement does not match Still owed. Look for amber figures: a payment recorded without its foreign amount was estimated at the carrying rate.
- The same currency appears twice in the revaluation. One line is what you owe and the other what you are owed; revalue each separately.