Unrealised gains as at the balance sheet date

Accounting
1

Hi
Can I just check something regarding the exchange rate gains please?

I understand that when an invoice is raised, the exchange rate is calculated as at that date. Then when the invoice is paid, the exchange rate at that date is is and any difference is currency gain or loss.

What about when we hit the year end and have to show trade debtors as at the balance sheet date? Does Quickfile automatically do this and convert the aged debtors as at that date rather than the date of when the invoice was raised?

I have tried to prove if this is the case by looking at the exchange rate at the balance sheet date as per XE.com which is used to do the other conversions but it is not giving me the answer I was expecting.

R

2

You dont need to do rate conversion for debtors at balance sheet date unless you are preparing accounts under full FRS 102 which has complex requirements for financial instruments disclosures on discounted future value etc

3

I’m afraid not, the loss/gain is only committed to the books at the point the invoice is paid. Any open invoices will reflect the rate at the point the invoice was created rather than the date entered on the balance sheet, you would therefore need to manually factor in any unrealised loss/gain.

4

Thanks for the reply but everywhere I look it states monetary assets at the Balance sheet date needs to converted at the rate on this date.

Not sure yet if we will be using FRS105 or FRS102 1A. I think we will have some clients FRS102 1a and some FRS 105…

Can you point me to where it says we don’t need to convert at balance sheet date?

Thank you!