Foreign currency purchases in profit/loss

Accounting
2

Hi @rozhawk

Exchange rates are captured for two points - invoice date and payment date. The related GBP value will then be recorded.If there’s a difference between the two exchange rates, then the loss/gain will be recorded against this.

For example, I have an invoice of €100.00 dated 4th November:

This has been recorded with an exchange rate of £1 = €1.1231, therefore is recorded at

812×47 4.2 KB

This is then marked as paid today at the current rate of £1 = €1.1655, and a currency gain is recorded too in account 2100 (Currency Charges):

819×95 9.22 KB

So instead of paying £89.04, we’ve now paid £85.80 because of the currency changes.

This is also shown at the top of the invoice:

733×49 3.58 KB

Hope that helps?