FX difference accounts settings

The register of "where to post FX differences" sets: one entry — a "profit / loss" account pair. When a foreign-currency debt is paid at a different rate than it arose, the base-currency difference has to land somewhere — payments and revaluation take the accounts from here.

Where to find it: Modules → Nominal Ledger → Registers → FX difference accounts settings

Walkthrough

The STANDARD set in the demo:

• FX profit account — 714 "Income from operating exchange differences": the gain lands here when the rate moved in your favour.
• FX loss account — 945 "Losses from operating exchange differences": the loss goes here.
• "Closed" — the set is retired: its accounts are no longer used, and the difference goes to the general accounts (see below).

Where the set works

A set is attached to an account: on a chart of accounts card the "FX difference accounts setting" field names the set's code. A payment takes the set of the debt account (receivables or payables), revaluation takes the set of the account being revalued. An account without a set posts the difference to the general accounts.

• Payments of foreign-currency invoices (incoming and outgoing): the difference between the debt at the document rate and at the payment rate is posted to the set's profit or loss account.
• Revaluation on closing the books: monetary currency balances are recomputed at the closing-date rate, the difference goes to the same accounts (accounts that must not be revalued are listed in Non-Monetary Accounts). The same holds for an account whose balance is kept by objects.
• Only one of the two accounts is set — the other side takes the general account of that side from Account Usage; the same happens when the set is closed.
• A sales invoice and a vendor invoice (foreign-currency prepayment offset) do not consult the set: the difference there goes to the general accounts.

Common situations

A foreign-currency payment will not post — it demands an FX difference account. Fill in both general accounts — "Foreign Exchange Expense" and "Foreign Exchange Income" on the "Debtors" tab of Account Usage. A payment with an FX difference always requires them, even when the debt account's card names a set: a set only replaces the general accounts, it does not make them optional, so creating a set will not clear this error.

Where did the payment difference go? Find the payment posting in Transactions: the row on 714 or 945 is it.

Why several sets? If different areas of accounting must post differences to different accounts — create a set per area; a typical configuration needs just one.

A set cannot be deleted: «A record of «FX difference accounts settings» is used in: Accounts!» A set can be deleted only while its code is on no card of the chart of accounts. Deleted, the set would leave the account card with a code that leads nowhere: the card could no longer be saved, and FX difference postings take their accounts from exactly the set with that code. First put another set on those cards.