Accounting for foreign exchange gain or loss from revalutaion

[Artem Braga]

Hello 

I have a question regarding business logic of Tryton for accounting of foreign exchange gain/loss on asset/liability. I'd like to illustrate my question on the following example: 

Functional currency of the company is USD. Company issues invoice for 100 EUR. Exchange rate as of the date of invoice issue is 1.1 USD for 1 EUR. Company has a receivable of 110 USD. As of reporting date, exchange rate is 1.2 and invoice is still not paid by customer. So, company has a receivable of 120 USD and 10 USD as foreign exhange gain. 

What is the Tryton's process flow to revalue the receivable and book this foreign exhange gain as of reporting date? What opeartions should be launched to run this revaluation transaction? 

Thank you and best regards

Artem

[Cédric Krier]

There is no automatic process in Tryton for now
(https://bugs.tryton.org/issue3765). You have to manually
reconcile those lines and put the write-off on the right account.

--
Cédric Krier - B2CK SPRL
Email/Jabber: cedric...@b2ck.com
Tel: +32 472 54 46 59
Website: http://www.b2ck.com/

[Artem Braga]

Website: http://www.b2ck.com/ \

I still do not get the needed result, which is -- the revaluation of account receivable in the amount of EUR 100 at the reporting date exchange rate and booking of USD 10 of foreign exchange gain to the write off account.

I do the following steps at the reporting date: 

1. Reconcile receivable line in EUR 

2. Write-off journal settings for reconciliation: default debit account and credit account have Kind:Revenue 

As a result of this reconciliation, the full amount of receivable at a starting exchange rate (USD 110) is credited from account receivable account and debited to default debit account in a write-off journal. 

Is there a mistake in the process of reconciliation? Or settings are not correct?

Thank you 

Artem

 

[Cédric Krier]

On 2017-04-17 14:03, 'Artem Braga' via tryton wrote:
> > On 2017-04-17 02:53, 'Artem Braga' via tryton wrote:
> > > What is the Tryton's process flow to revalue the receivable and book
> > this
> > > foreign exhange gain as of reporting date? What opeartions should be
> > > launched to run this revaluation transaction?
> >
> > There is no automatic process in Tryton for now
> > (https://bugs.tryton.org/issue3765). You have to manually
> > reconcile those lines and put the write-off on the right account.
>

> I still do not get the needed result, which is -- the revaluation of
> account receivable in the amount of EUR 100 at the reporting date exchange
> rate and booking of USD 10 of foreign exchange gain to the write off
> account.
>
> I do the following steps at the reporting date:
> 1. Reconcile receivable line in EUR
> 2. Write-off journal settings for reconciliation: default debit account and
> credit account have Kind:Revenue
>
> As a result of this reconciliation, the full amount of receivable at a
> starting exchange rate (USD 110) is credited from account receivable
> account and debited to default debit account in a write-off journal.
>
> Is there a mistake in the process of reconciliation? Or settings are not
> correct?

It looks like you are just reconciling the payment line alone. You must
reconcile it with the line of the invoice.

[Artem Braga]

Returning back to the issue of foreign exchange revaluation, I can not get the proper result:

1. Invoice is created in foreign currency as of date 1

2. Invoice creates two entries (DR Receivable-CR Revenue)

3. Invoice is not paid

4. As of reporting date 2, exchange rate increased and receivable in foreign currency should be revaluated (DR Receivable - CR Revenue/FX income) for the exchange rate difference. 

I reconcile the lines of invoice entry (Receivable-Revenue) and as a result get the following: 

Full invoice amount is:

Dr write off account (reconciliation journal)

Cr Receivable line

Dr Revenue line

Cr write off account (reconciliation journal)

Not an expected result. Appreciate any advice.

Best regards

Artem 

 

[Cédric Krier]

On 2017-05-23 12:26, 'Artem Braga' via tryton wrote:
> Returning back to the issue of foreign exchange revaluation, I can not get
> the proper result:
>
> 1. Invoice is created in foreign currency as of date 1
> 2. Invoice creates two entries (DR Receivable-CR Revenue)
> 3. Invoice is not paid
> 4. As of reporting date 2, exchange rate increased and receivable in
> foreign currency should be revaluated (DR Receivable - CR Revenue/FX
> income) for the exchange rate difference.

For now, such revaluation must be managed manually in Tryton.

> I reconcile the lines of invoice entry (Receivable-Revenue)

I do not understand this. You can not reconcile line from different
accounts.

> and as a result get the following:
>
> Full invoice amount is:
>
> Dr write off account (reconciliation journal)
> Cr Receivable line
>
> Dr Revenue line
> Cr write off account (reconciliation journal)

I do not understand what you are describing.