Euro to GBP bank transfer with exchange rate gain

Kirk_MacDonald · ‎February 05, 2022

Hi everyone,

I've been searching around the forum and cannot find a post that solves my problem therefore I would be grateful if anyone can help.

I have a UK company and we recently started selling in Euros (therefore using Multi currency option).

We invoice our customer in Euros so for example...

Invoice Dec 2021 for 100 Euros to out customer

Euro	E/R	GBP
€ 1,000.00	0.82775	£827.75

When the customer pays we have a different exchange rate

Euro	E/R	GBP	E/R Gain / Loss
€ 1,000.00	0.82920	£829.20	£1.45

In QBO the £1.45 is recorded as an exchange rate gain so that is all ok.

The issue I have is the payment went to a Euro bank account and now we have transferred to our GBP account. Doing a straightforward transfer between accounts does not realise an exchange rate gain or loss but as I understand it from an accounting perspective this needs to happen.

Bank transfer:

Euro	E/R	GBP	E/R Gain / Loss
€ 1,000.00	0.84041	£840.41	£11.21

So the question i have is how do I record the transfer to realise the gain?

I have tried journaling but so far have been unsuccessful.

I appreciate your assistance in helping me solve this.

Cheers,

Kirk

Archie_B · ‎February 06, 2022

Thank you for reaching the Community, Kirk_MacDonald.

I'd like to share an idea in handling different currency for your account receivables in QuickBooks Online.

To track the changes in exchange rates on your foreign balances, you can create a home currency adjustment to realise gain or loss.

Here's how:

Go to the Gear :gear: icon, then Currencies.
Find the currency you want to adjust.
Under the Actions column, select the small arrow ▼ icon.
Choose Revalue Currency.
Pick the date (today or a day in the past) to run a currency revaluation.
Select whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
Select the account(s) you want to apply the revaluation to.
Click on Revalue.

I've added this article for more information: Enter home currency adjustments for your foreign balances.

I also recommend consulting an accounting professional before entering these adjustments.

Get back to us if you still have other concerns about exchange rates. I'll be in touch. Have a good one.

View solution in original post

Archie_B · ‎February 06, 2022

Thank you for reaching the Community, Kirk_MacDonald.

I'd like to share an idea in handling different currency for your account receivables in QuickBooks Online.

To track the changes in exchange rates on your foreign balances, you can create a home currency adjustment to realise gain or loss.

Here's how:

Go to the Gear :gear: icon, then Currencies.
Find the currency you want to adjust.
Under the Actions column, select the small arrow ▼ icon.
Choose Revalue Currency.
Pick the date (today or a day in the past) to run a currency revaluation.
Select whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
Select the account(s) you want to apply the revaluation to.
Click on Revalue.

I've added this article for more information: Enter home currency adjustments for your foreign balances.

I also recommend consulting an accounting professional before entering these adjustments.

Get back to us if you still have other concerns about exchange rates. I'll be in touch. Have a good one.

Kirk_MacDonald · ‎February 06, 2022

Worked it out!

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Euro to GBP bank transfer with exchange rate gain