Exchange Gain or Loss

Hello, Alex_St. 

Thanks for considering using the Multicurrency tool in managing your foreign currency. Allow me to provide some information on how this option works. 

The feature mentioned above is only available in QuickBooks Online Essentials, Plus, and Advanced. Once you turn it on, the following fields and labels are added to your company.

• Chart of Accounts: A Currency column appears on the Chart of Accounts, identifying each account's currency. Once an account has had a transaction posted to it, you can no longer change the account's currency,
• Bank and Credit card registers: A currency notation appears in the headings of the Payment, Deposit, Sales tax, and Balance Due columns on Bank and Credit card registers (or account histories). 

After activating the Multicurrency option, you’ll no longer be able to turn it off and change the home currency. If you wish to turn it on, let me share the steps on how to accomplish this task in QBO.

1. Go to the Gear icon at the top and pick Account and settings under Your Company.
2. Choose the Advanced menu on the left panel and click the Pencil icon for Currency.
3. Toggle the slider for Multicurrency to the right to turn it on.
4. Click Save and Close.

Let me share this article for additional information. It provides an overview on how to add or delete currencies, enter the exchange rate, add foreign customers or suppliers to name a few: About Multicurrency. 

In regard to your second question, Exchange gain or loss expense happens if the current exchange rate is higher or lower than the previous rate. For more details about exchange rates, see the Learn about exchange rates in QuickBooks Online article.  

Feel free to get back to me if you have additional questions about Exchange Gain Or Loss in QuickBooks Online. Have a good one. Stay safe!

Hi, AileneA!

Thanks for your answer, but I need a littele bit more explanation about how Exchange Gain or Loss works in QBO Plus.

Really good explanation article you gave me to read (https://quickbooks.intuit.com/learn-support/en-us/multi-currency/about-exchange-rates/00/186361). Do you have any article what is going on next in profit and loss report when you don't exchange 20 CAD till the next reporting date with another exchange rates (not 0.79)? After a year you will have the same 20 x 0.79 = 15.77 USD in your Balance Sheet?

According to IAS, GAAP and other Standarts the Monetary Assets have to be revaluate / re-evaluate / reastemate / recalculate to new exchange rate at the reporting date (in most cases every month).

Thanks for getting back to this thread, @Alex_St. Let me add further details about Exchange Gain or Loss in QuickBooks.

I can see how it is beneficial for you to have an article on what will happen next in the profit and loss report when you don't exchange 20 CAD till the next reporting date with another exchange rate, but it is currently unavailable.

Regarding Monetary Assets, just like IAS, GAAP, and other Standards, this will be reevaluated or recalculated to a new exchange rate at the reporting date.

In addition to that, let me share these relevant articles you can use to understand the functionality of multicurrency in QuickBooks:

• About Multicurrency
• Frequently Asked Questions about Home Currency Adjustments

Feel at ease to comment down below if you have other QuickBooks-related concerns. I'll be happy to help you again. Keep safe!

Hi, Rubielyn_J!

As I see your programm don't reevaluate or recalculate monetary assets at random reporting date.

If I receipt today 1 000 000 EUR (about 1 158 782 USD), in a centuries it will be the same numbers in reports.

Looks like, your multicurrency mode is suitable for keeping accounting records, but not for generating truthful Financial Statements. :(