Foreign currency bank account year-end adjustment

Thank you for the quick and correct answer to my question. I appreciate it so much! You saved me a lot of time!

Hello. I am using QB Pro Desktop. I recently closed our Euro account that we have had since 2013 or so. The Euro account is reconciled to zero, but the balance sheet is showing ~34K balance. Do you have any ideas on how to clear this out without claiming it as a loss? 

Thank you, 

Rachel 

Hi there, rdenker28. 

I'll share a way on how you can handle it without claiming it as a loss.

You can create a journal entry to get this done. Here's how:

1. Go to the Company menu and select Make General Journal Entries.
2. Fill out the fields to create your journal entry. Make sure your debits equal your credits when you’re done.
3. Fill in the necessary information. Optional: Under Memo, enter the item reference.
4. Click Save & Close.

Note: I would suggest reaching out to your accountant to guide you with the correct accounts to debit and credit. If you're looking for an accountant, you can find one by clicking on this link: Find an accountant.

For additional information and tips, you can read through this article: Create a journal entry in QuickBooks Desktop.

Feel free to visit this guide when reconciling your account:

• Reconcile an account in QuickBooks Desktop.
• Fix issues when you're reconciling in QuickBooks Desktop

If you have additional questions, please let me know by posting another one below. I'm here to assist you more, rdenker28. Take care and stay safe always.

I have exactly the same problem. We closed our USD bank account, USD balance is zero, and our book has a 67k balance in CAD (home currency in CAD).

Did you find a way to solve your problem and do you mind sharing it with me? Thank you!

Hello, 

I have not figured it out. For now, I entered it as an expense. This doesn't really work since it is a cumulative amount over many years. Please let me know if you have done any more research or have found anything out!

Regards, 

Rachel C. Denker

Hi Rachel,

I think I've figured out a way to do it.

You may need to reverse your expense entry to return to the start point.

When your foreign bank is at zero, and you have a balance in home currency, you can do a fx revaluation to fix it.

Go to Settings - Currencies - at the drop down Revalue currencies. Because foreign bank is 0, and 0 times any fx rates would return a 0 home currency. My accounts seems to look ok after I did it this way.

Hope it helps.

Jessie

I am in the current Enterprise version, but I believe it is the same

From the top Menus:

Company > Manage Currency > Home Currency Adjustment

Then enter the date you are trying to reconcile to and enter the Currency 

click "Calculate Adjstement"

Make any adjustmetns to its calculation and then "Save & Close"

Alternatively, you can make your own General Journal entry and make sure you've selected the "Home Currency Adjustment" check box.  

The Alternate approach works great! I had a similar issue with Foreign Currency AP accounts where all suppliers had been Paid, and the AP screens showed 0.00 but the balance sheet still showed small amounts.  the Home Currency Adjustment Check box on the JE did the trick. to move the amounts off to Exchange Gains and Losses.

I am a bit surprised that the Standard AP process didn't charge these values off to Exchange Gain/loss when they first happened... perhaps because i needed to make a deposit payment ahead of receiving the invoice/product. Hum?

i want assistance on how to adjust individual foreign suppliers balance as the valuation only change figure for the main account foreign payables account and don't change individual foreign suppliers, even after revaluation they still have wrong home currency values

Hi, RWMUCHIRI. I appreciate you for joining the thread. 

When performing home currency adjustments for Accounts Payable (A/P) in QuickBooks Online (QBO), Journal Entries (JE) are created that don’t directly adjust the home currency values at the supplier level. Instead, these entries provide essential information for accurately reporting Unrealized gains or losses on financial statements. To resolve the adjustment not reflecting at the supplier level, you might need to create a separate JE. Let me add further details how QBO handles these adjustments and guide you on the actions we can take to resolve this.

The effects of a home currency adjustment are represented as unrealized gains or losses in A/P (or Accounts Receivable). In other account types, such as bank accounts, these adjustments can be seen as realized gains or losses. Since making home currency adjustments for supplier levels requires creating JEs and selecting the correct accounts, I recommend collaborating with your accountant.

If you don't have an accountant yet, our ProAdvisor service can connect you with a local expert. Many ProAdvisors offer free consultations, providing an excellent opportunity to get professional advice tailored to your needs. Enter your zip code at this link: Find an Accountant. 

I'm also adding this article about the frequently asked questions about home currency adjustments in QBO as additional guide: Frequently asked questions about Home currency adjustments. 

For future reference, I'm adding this article about running financial reports in QBO to verify that the home currency adjustments have been applied correctly: Run a report in QuickBooks Online. 

If you have further questions about how home currency adjustments work in QBO, don't hesitate to respond to this thread. We are dedicated to providing ongoing support.