Currency Adjustments

There is always a little amount of risk involved while transacting with customers dealing in foreign currencies. The risk is due to the fluctuation of exchange rates on a daily basis. Most of the times it is a profitable transaction, except for a few unlikely days of bad exchange rates.

In Zoho Books you can have an insight on the profit or loss incurred due to the change in exchange rates and also apply the changes to open transactions.

Let’s consider a scenario:

In this page, we will learn about:

Adjusting Base Currency

To adjust the base currency in Zoho Books:

Base Currency Adjustments

Fields Description
Currency Currency for which the adjustment is made.
Date of Adjustment Date on which the adjustment is made.
Exchange Rate Exchange rate of the foreign currency with respect to the base currency of your organization.
Notes Fill in the reason the adjustment is being made (mandatory).

Base Currency Adjustments

It is recommended to have an accountant or a bookkeeper to have the adjustments made according to the date.
Open transactions are mandatory to make base currency adjustments.

Fields Description
Account The account which is affected due to change in exchange rates.
Balance (FCY) This represents the foreign currency amount.
Balance (BCY) This represent the your organization’s currency (SAR) amount.
Revalued Balance (BCY) The total amount in BCY after the new exchange rate is adjusted and revalued.
Gain or Loss (BCY) This column shows whether you have made profit due to the change or incurred a loss. An amount with a negative sign will depict the loss incurred.

FCY: Foreign Currency
BCY: Base Currency

Confirm Adjustment

The adjustment will be shown in the following page.

Confirm Adjustment

Deleting Currency Adjustments

You can delete the base currency adjustment you made anytime by selecting the entry from the Currency Adjustment window and clicking the Delete option.

Business Overview

Reports for Currency Adjustments

As soon as a currency adjustment is made, the particular account affected will be uploaded with new values in the Reports section as given below:

Business Overview
Fields Description
Profit and Loss Non Operative Income/Expense (Exchange Gain or Loss)
Balance Sheet Current Assets (Accounts Receivable)
Fields Description
Account Transactions A entry with Base Currency Adjustment as Type will be created.
Journal Report A new section will be created with the date and title as Base Currency Adjustment.
Trial Balance Assets (Accounts Receivable)
Fields Description
Realized Gain or Loss Transaction Type: Base Currency Adjustment

See Also:
Chart of Accounts
Transaction Locking
Manual Journals

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