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Tom K-4
Level 1

Separating Currency Gain from Foreign Account Balance

My home currency is CAD and I have both CAD and USD deposit accounts. When I compare bank statements with the QB chart of account for my USD Deposits account (both shown in USD) everything lines up. All the transactions match, the balances in USD match. It's all good.


The problem comes when I run a balance sheet report. My initial thought was the USD account balance would be converted to CAD at end date exchange rate and put on the balance sheet. For example if the bank statement and QB chart of account both said USD 1,000, the balance sheet would show CAD 1,280 or something. Instead, the balance sheet is showing a notably higher value: CAD 1,550.


From what I've been told by support, this is capturing the gain on forex. Where we just happened to transfer CAD funds into the USD account when USD was weaker, and we had USD outflows timed when USD was stronger comparatively.


I understand forex gain, but I don't understand why it's included in the asset balance. Is there a way I can have the gain separated and shown on the income statement, and have the USD account balance as simply the ending USD balance multiplied by the ending exchange rate? I've though of journal entries, but this effects the chart of accounts and then it no longer lines up with the bank statement. 


Thanks in advance for any assistance.

1 Comment 1
Level 7

Separating Currency Gain from Foreign Account Balance

Hi Tom


If your USD accounts are marked in the alternate currency, you should be able to perform a function called 'revaluing' your account - this is found under Gear Icon (Settings) -> Currencies then where it says Edit Currency Exchange Rate click on the arrow next to it, and select Revalue


This will take into account the current exchange rate and convert the balance in the account to a 'current value' with the difference showing up on your profit and loss as a gain/loss on fx.


Hope this helps!


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