The following sections review information about Home currency adjustments that can help you when using the Multi-currency feature in QuickBooks Online.
When you create a Home currency adjustment, QuickBooks Online creates a journal entry with zero gain or loss for Accounts Receivable or Accounts Payable. The journal entries keep track of the date you revalued a currency, the currency you revalued, and the exchange rate.
Reports use the exchange rate from such adjustments to calculate unrealised gains and losses.
Home currency adjustment journal entries with non-zero dollar amounts indicate that you've run Home currency adjustments on bank or credit card accounts and have realised gains or losses.
While you can edit the journal entry's number and Memo field, and adda attachments for your records, you can't change the date, debit or credit amounts, or exchange rate for the journal entry to ensure that unrealised gain or loss amounts can be accurately calculated on reports.
If you need to change the date or the exchange rate, you'll have to delete the journal entry and run the currency revaluation again.
Unrealised foreign exchange gains or losses are profits or losses that have occurred on paper, due to changes in exchange rates. These gains or losses are only realised after the transactions have been completed, when money has actually been collected or paid.
That is why QuickBooks Online shows the effect of a Home currency adjustment on Accounts Payable or Accounts Receivable as an unrealised gain or loss, and the effect on account types such as bank accounts as a realised foreign exchange gain or loss. Unrealised gains or losses are also not reflected in the general ledger or the trial balance.
You can review the Transaction Detail report for more information about your unrealised gains or losses.
You can track Home currency adjustments on the Revalue history tab:
- Select Settings ⚙️.
- Select Currencies.
- From the Edit currency exchange drop-down list in the Action column, select Revalue currency.
- On the Revalue page, select the Revalue history tab.
The tab displays a list of past currency revaluations, their dates and exchange rates, and links to the related journal entry for each of them.
For more information about Home currency adjustments, see Understanding Home Currency Adjustments
The following reports display information about unrealised gains or losses:
- Profit and Loss report
- Balance sheet
- Customer Balance Detail report
- Supplier Balance Detail report
- Statement of Cash Flows
|Tip Revalue your foreign currencies immediately before running reports to see the most updated and accurate unrealised gain or loss amounts.|
You have to customise the Customer Balance Detail report and the Supplier Balance Detail report to view unrealised gains or losses on those reports.
- Select Reports.
- Locate and open the Customer Balance Detail or Supplier Balance Detail report.
- Select Customise.
- In the Customise report window, open the Rows/Columns section and select Change columns.
- Select the Unrealised Gain or Loss checkbox.
- In the Ageing section, under Ageing method, select Report date.
- Select Run report.
For even more detail, you can also turn on the Revalued Open Balance or Revalued Exchange Rate columns for these reports before you run them.
On the Profit and Loss report or Balance Sheet, you can select the amount displayed on the report for the account you're reviewing to open the Transaction Report for that account.
If the account has open transactions (such as an invoice) and you ran at least one Home currency adjustment, the Transaction Report displays additional rows for journal entries that show the date and exchange rate at which you revalued your Foreign currency. These journal entries display 0.00 (as explained in the previous section).
The total unrealised gain or loss appears in the row for each of your open transactions so you can easily see how all Home currency adjustments affect this transaction.
In addition, the Profit and Loss Details report displays 0.00 journal entries in the Exchange gain loss section to provide you with more details on exchange rates and revaluation dates that do not affect your books.
For accounts with open Foreign transactions (either Accounts Receivable or Accounts Payable), the Transaction Report displays a row for Previous Unrealised Gain or Loss.
This row reverses the unrealised gain or loss from the previous period so that QuickBooks Online can show the accurate unrealised gain or loss for the current reporting period.
Realised gains or losses don't need to be reversed across periods, so the Previous Gain or Loss row does not appear on the Transaction Report for foreign bank accounts.