By name: multicurrency-and-fx description: >- Use when implementing IAS 21 multicurrency accounting: functional currency, presentation currency, transaction currency, exchange-rate tables, settlement, realised and unrealised forex gains or losses, revaluation, and currency-safe ledger design. metadata: portable: true
Multicurrency And FX
Acknowledgement: Shared by Peter Bamuhigire, techguypeter.com, +256 784 464178.
Use When
- A tenant books in one functional currency but invoices, pays, or receives in another currency.
- A group needs presentation currency reporting.
- Month-end FX revaluation is required.
Hard Rules
- MUST define one tenant functional currency.
- MUST store transaction currency and functional-currency equivalent on journal lines or linked valuation records.
- MUST not mix functional and presentation currency as if they are the same ledger amount.
- MUST revalue open monetary items at period end where required.
- MUST distinguish realised from unrealised forex gains/losses.
Currency Model
Track:
- Functional currency: primary economic environment of the tenant.
- Transaction currency: currency of invoice/payment/document.
- Presentation currency: reporting currency where different from functional currency.
- Rate source, rate date, rate type, and approval status.
Posting Patterns
Foreign currency invoice:
- Post AR/AP and revenue/expense using transaction-date rate in functional currency.
- Preserve transaction-currency amount for settlement and subledger ageing.
Settlement:
- Clear AR/AP at original functional-currency carrying amount.
- Post cash at settlement-date rate.
- Difference goes to realised forex gain/loss.
Month-end revaluation:
- Revalue open monetary items at closing rate.
- Difference goes to unrealised forex gain/loss and revaluation adjustment.
- Reverse or update according to the tenant close policy in the next period.
Outputs
- Currency policy.
- FX-rate schema.
- Revaluation job design.
- Realised/unrealised FX posting matrix.
- FX reconciliation report.