I'd be happy to share how the exchange gain or loss works in QuickBooks Online, hamdifarah2.
When a company buys or sells goods and services using a foreign currency, this can result in a foreign exchange gain or loss. It happens when the value of the foreign currency fluctuates relative to the company's home currency, creating differences in their assets and liabilities.
The exchange rate refers to the value of foreign currency when converted to the seller's local currency. If the value of the local currency increases after the conversion, the seller earns a foreign currency gain. Otherwise, they incur a foreign exchange loss if the value of the local currency declines. If you cannot calculate the current exchange rate at the exact time of the transaction, use the next available rate.
There are two types of foreign exchange gains or losses. First, the Unrealised gains or losses occur on paper due to changes in exchange rates and are only realised after completed transactions. For example, when money has been collected or paid. Second, QuickBooks Online displays the effect of a Home currency adjustment on Accounts Payable or Accounts Receivable as an unrealised gain or loss. The effect on account types such as bank accounts is shown as a realised foreign exchange gain or loss. These are not reflected in the general ledger or the trial balance.
See this article for more answers to questions: Frequently Asked Questions about Home Currency Adjustments.
Feel free to use this guide for rate calculations on transactions: About exchange rates.
Keep me informed if you require further assistance managing exchange gain/loss recorded in QuickBooks. I'm always happy to help.
