Legally, G/L account transactions performed in foreign currency are recorded by being converted to local currency using the exchange rate at the date of transaction. In such cases, when the balances of G/L accounts in local currency are viewed at a given time, the current effect of foreign currency transactions cannot be viewed. In other words, the local currency balance of an account processed in foreign currency can be more or less than the actual amount.
The calculation and posting of increases and decreases in local currency amounts of account transactions in foreign currency due to exchange rate value changes in time are called Exchange Rate Difference Calculations. This option is located in the Operations menu of the General Ledger section.
The G/L Account Code, Foreign Currency Type, Calculation Date and Exchange Rate Difference Type criteria are important for exchange rate difference calculations.
The G/L slip exchange rate difference calculation window is used to specify the filter conditions to be applied for exchange rate difference calculations. The filter options and functions are:
Calculation Date: Indicates the date of which the daily exchange rate will be used for the calculation. The exchange rate value is read from the foreign currency file.
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Exchange Rate Diff. Calculation Method: This filter line must be selected as "By Divisions" in case it is required to calculate exchange rate difference separately by divisions selected in the Division line. If it is selected as "General", exchange rate differences of all defined divisions are added, and exchange rate difference slip is generated for the head office.
Once the conditions are set for the exchange rate difference calculation, the exchange rate difference calculation transaction is started.
Calculated exchange rate differences are inserted into the Journal Slip generated by the application. The date of the Journal Slip is the date specified on the Exchange Rate Difference window. Calculated exchange rate differences are recorded under the accounts for which the calculation is performed, or the exchange rate difference account specified on the record. Transactions of each calculated account are displayed on a separate line on the Journal Slip. Exchange rate differences can be grouped under a single account, or a separate exchange rate difference account can be opened for each account.
If the exchange rate value at the date specified cannot be read from the Exchange Rate Table, or if the accounts are not processed with the specified foreign currency type, the application displays "No account found with exchange rate difference" warning message. Likewise, exchange rate difference calculations cannot be performed when a date different than the working days specified while defining the company is entered.
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