Set Up Accounts for FX Revaluation

Foreign exchange (FX) revaluation is a necessary process for organizations that operate with multiple currencies. This procedure helps ensure that financial statements accurately reflect the current value of foreign currency transactions, including open invoices and vendor bills.

Define FX Revaluation Settings

To set up accounts for FX revaluation:

1. Click the company icon in the top right corner of the screen.

2. Go to Organization Settings > Accounting.

   
3. Under the Multi-currency section, set up the following fields:

   1. Enable Multi-Currency: Ensure that multi-currency functionality is turned on to allow transactions in different currencies.

   2. Set Revaluation Start Dates: Define specific dates for foreign currency revaluation to begin, which is particularly important for accounts payable (AP) and accounts receivable (AR).

      1. AP revaluation start date (optional)

      2. AR revaluation start date (optional)

      Note: If you wish to avoid recording revaluations prior to a certain date, you can set a start date. All bills dated before this date will not have unrealized gains or losses recorded, although realized gains or losses will still be captured upon payment. When a start date is set, all bills with a bill date prior to this date will not have unrealized gains/losses recorded, while realized gains/losses will still be accounted for upon payment.

   3. Choose an account for realized FX Gain/Loss: Select an account from the chart of accounts to record realized gains or losses from foreign exchange transactions.

   4. Choose an account for unrealized FX Gain/Loss: Select an account for recording unrealized gains or losses, which are adjustments based on current exchange rates for transactions not yet settled.

      Note:

      While the realized and unrealized accounts can be the same, it is advisable to differentiate them for better clarity in financial reporting.

   5. Choose an account for Accounts Receivable Revaluation (Balance Sheet): Choose a dedicated account for reflecting any revaluation of accounts receivable due to changes in FX rates.

   6. Choose an account for Accounts Payable Revaluation (Balance Sheet): Select an account designated for revaluation of accounts payable in response to foreign exchange rate fluctuations.

   7. Create Default FX Accounts (optional): Automatically generates default accounts for managing foreign exchange gains and losses, simplifying the setup process.

   8. Create Default CTA Account (optional): Enables the creation of a default Cumulative Translation Adjustment (CTA) account, used for translation adjustments due to changes in exchange rates.

      
4. Click Save Changes.

See Also

Learn more about FX revaluation:

• Set Up Accounts for FX

• Revaluation & FX Translation

• Where does Rillet get FX Rates?

• Journal Entries in FX