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Forums » Accounting & Financial Management

Multiple currencies Inome/Expense query

    • 6 posts
    January 25, 2009 1:48 PM EST

    As reporting is done only in the home (native) currency, does this mean that any Income or Expense has to be designated in the native currency only, even if a transfer doesn’t actually happen?

     

    For example if an entity`s home currency is USD and the same entity has a bank account in France in EUR. I understand that transactions will involve forex gains or losses. Suppose interest (an income) 10 EUR is received in this EUR bank account, how does this work?

    Should the `Interest Income` account be in USD? In that case, when I receive an interest which is in EUR, I use some arbitrary exchange rate of that day such as 1 EUR = 1.3 USD and show the profit as 13 USD?

    Or, do I create a new Income account with currency EUR and show the profit as 10 EUR?