APPENDIX
Working with
Multiple Currencies
H
I
f you have customers who pay you in various currencies or vendors who want to
be paid in their countries’ legal tender, the QuickBooks’ multicurrency feature is
a huge help. With a little setup on your part, QuickBooks takes care of converting your home currency into other currencies (and vice versa) as you record and
pay bills, enter and receive payments for invoices, and create other transactions
in foreign currencies. The program also tracks your gains or losses from all those
currency conversions.
This chapter begins with a question: should you turn on QuickBooks’ multicurrency
feature? (Once you turn it on, you can’t turn it off.) Since you’re reading this chapter, you probably answered “yes.” In that case, read on to learn how to turn on the
multicurrency preference, activate the currencies you need, and then assign them
to the vendors and customers located in other countries. If you have bank accounts
based in other currencies, like a French checking account for your Paris office, you
can assign currencies to those accounts as well.
When the multicurrency feature is turned on, you’ll see Currency fields and labels
scattered throughout QuickBooks’ windows and dialog boxes. For the most part,
the program takes care of filling in those currency fields and converting values between foreign currencies and your home currency. In this chapter, you’ll learn how
to record transactions in foreign currencies.
When you work with multiple currencies, you may earn or lose money due to exchange rate changes; for example, from the time you record an invoice to when
you deposit the customer’s payment. This chapter describes reports that show
your unrealized and realized currency gain and losses. In addition, you’ll learn how
to make currency adjustments so your records reflect exchange rates current as of
the end of a financial reporting period.
H-1
DO YOU NEED
MULTIPLE
CURRENCIES?
Do You Need Multiple Currencies?
If you pay bills or receive payments in foreign currencies, turning on QuickBooks’
multicurrency feature is a no-brainer. Why wouldn’t you want QuickBooks to automatically convert values between your home currency and foreign currencies,
and keep track of your currency gains or losses? Just know that once you turn this
setting on in a company file, it’s on for good.
What’s more, turning on multiple currencies has consequences, so you don’t want
to turn on this setting unless you need it. For example, when it’s turned on, several
QuickBooks features become unavailable, including Insights (page 31), Income
Tracker (page 340), Bill Tracker (page 181), Create Batch Invoices (page 239), and
selecting multiple customers in the “Invoices for Time and Expenses” window (page
251). In addition, if you use multiple currencies and Express banking mode (page
623), you’ll see only payees and accounts based in U.S. dollars. In addition, in the
Write Checks window’s Main tab (page 198), the Pay Online checkbox won’t be
available if the multiple currency setting is turned on.
NOTE When the multicurrency setting is turned on in your company file, you can’t convert the file to Quick-
Books for Mac or QuickBooks Online. However, you can use products like Transaction Pro Exporter and Transaction
Pro Importer (page 698) to move your records to a single-currency company file, and then convert that file.
Setting Up Multiple Currencies
Before QuickBooks can perform its multicurrency magic, you have a few setup tasks
to perform. This section guides you through the steps.
Turning on Multiple Currencies
Activating the multicurrency feature is as easy as turning on its preference. Here’s
how:
1. Choose Edit→Preferences→Multiple Currencies, and then click the Company
Preferences tab.
QuickBooks automatically selects the “No, I use only one currency” option.
2. Select the “Yes, I use more than one currency” option.
The Tracking Multiple Currencies message box opens, warning you that you
can’t turn this feature off once it’s turned on.
3. Click Yes.
QuickBooks sets your home currency to US Dollar, as shown in Figure H-1.
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QUICKBOOKS 2016: THE MISSING MANUAL
SETTING UP
MULTIPLE
CURRENCIES
FIGURE H-1
QuickBooks automatically
selects US Dollar as the
home currency. If you use
a different home currency,
choose it in the “Select the
home currency you use in
transactions” drop-down
list. To see all available
currencies, choose <View
More Currencies> in the
list.
4. If you use a different currency as your home currency, choose it in the “Select
the home currency you use in transactions” drop-down list.
If the currency you want doesn’t appear in the drop-down list, at the top of the
list, choose <View More Currencies>. When the list displays all available currencies, choose the one you want.
5. Click OK to save your settings and close the Preferences dialog box. In the
Warning message box that tells you your company file will close and reopen
with updated settings, click OK.
When your company file reopens, the multicurrency feature is turned on.
TIP If you change your mind and don’t want to turn on the multicurrency feature, in the Preferences dialog
box, click Cancel instead.
Once you turn on multiple currencies, QuickBooks makes some changes to your
company file. Here’s a summary of what you’ll see:
• The Currency List displays all the currencies in your company file. (Most of them
are inactive initially; see page H-4 to learn how to activate currencies.) To open the
list, choose Lists→Currency List or Company→Manage Currency→Currency List.
• All existing names in the Vendor List and Customer List are automatically assigned your home currency.
• All existing accounts in your chart of accounts are assigned your home currency.
Appendix H: Working with Multiple Currencies
H-3
SETTING UP
MULTIPLE
CURRENCIES
TIP You might wonder what to do if you stop doing business with foreign-currency customers and vendors.
The answer is nothing. Simply skip the currency boxes in QuickBooks’ windows and dialog boxes; the program
automatically fills them in with your home currency.
Activating Currencies
Initially, QuickBooks activates only a handful of currencies, such as US Dollar,
Canadian Dollar, Euro, and Japanese Yen. If you pick up customers who use other
currencies, here’s how to activate those currencies:
1. Choose Lists→Currency List to open the Currency List window.
At the window’s bottom, QuickBooks automatically turns on the “Include inactive” checkbox, so you can see all the currencies in the company file. Inactive
currencies include an X in the column to the left of the Currency column.
2. To activate a currency, click the X to the left of its name.
The X disappears, indicating that the currency is now active.
Now, when you open a Currency drop-down list, the newly activated currency appears in the list.
Creating a New Currency
Out of the box, QuickBooks includes all currencies that exist at the time the program
was released. But every so often a new currency is born, such as the euro, which
became legal tender for many European countries in 1999. Here’s what you do if the
currency you need doesn’t exist in the Currency List.
1. Choose Lists→Currency List. In the Currency List window, choose Currency→
New (or press Ctrl+N).
The New Currency window appears (Figure H-2).
2. In the Name box, type the currency name, such as Intuitland Dollar. In the
Code box, type the code for the currency.
Currency codes begin with the country’s two-character Internet country code.
The third character represents the currency. For example, the US Dollar code
(USD) includes the United States Internet code (US) and “D” for dollar.
3. If the currency uses a format different from the one to the Format label’s
right, click Change Format. After you format the currency, click OK.
In the Change Currency Format dialog box that opens, QuickBooks initially selects Comma in the “Thousands separator” drop-down list. You can also choose
Period, Space, or Apostrophe. In the “Digit grouping” drop-down list, QuickBooks initially selects groups of three, such as “##,###,###”. In the “Decimal
places” drop-down list, select the number of decimal places at the end of the
number. Finally, in the “Decimal separator” drop-down list, choose the punctua-
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QUICKBOOKS 2016: THE MISSING MANUAL
tion that acts as the decimal separator. (If you choose Period as the thousands
separator, QuickBooks automatically changes the decimal separator to Comma.)
SETTING UP
MULTIPLE
CURRENCIES
FIGURE H-2
Type the currency’s
name in the Name box.
In the Code box, fill in
the standard three-letter
code for the currency.
(QuickBooks uses that
code to download the
currency’s exchange rate.)
If the currency uses a different format than the one
shown, click the Change
Format button.
4. Click OK to close the New Currency window.
That’s it! The new currency takes its place in the Currency List.
Assigning Currencies to New Customers, Vendors, and
Accounts
Each customer, job, or vendor can have only one currency and you can’t change
their assigned currencies if you’ve recorded any transactions for them. So if a company moves from Florida to France and starts using euros, you’ll need to close its
current balance by receiving payments for outstanding customer or job invoices,
or by paying a vendor’s bills. At the same time, you can create a new customer, job,
or vendor record in QuickBooks (with a slightly different name) and assign the new
currency to it. If the customer, job, or vendor no longer uses the original currency,
you can make the old record inactive (page 55).
NOTE QuickBooks creates a separate Accounts Receivable or Accounts Payable account for each currency
the first time you assign it to a customer, job, or vendor. For example, when you assign a currency to a customer,
QuickBooks creates an Accounts Receivable account for that currency, such as “Accounts Receivable – JPY” for
Japanese Yen. When you assign a currency to a vendor, the program adds an Accounts Payable account, such as
“Accounts Payable – CAD” for Canadian dollars.
Appendix H: Working with Multiple Currencies
H-5
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
Here’s how you assign a foreign currency to a new vendor, customer, or account:
• In the New Customer window (in the Customer Center, choose New Customer
& Job→New Customer), QuickBooks automatically fills in the Currency box with
your home currency, so you usually don’t have to change this value. But if the
customer pays in a foreign currency, choose it in the Currency drop-down list.
• In the New Vendor window (in the Vendor Center, choose New Vendor→New
Vendor), choose the vendor’s currency in the Currency drop-down list.
• In the Add New Account window (press Ctrl+A to open the Chart of Accounts
window, and then press Ctrl+N), select either the Bank or Credit Card option. In
the Add New Account window, QuickBooks automatically fills in the Currency
box with your home currency. If you’ve opened a bank account in another
country, choose the bank account’s currency in the Currency drop-down list.
Updating Exchange Rates
An exchange rate represents the conversion rate of one country’s currency into another. Exchange rates change constantly, but how often you update exchange rates
is entirely up to you. If foreign currency transactions are as rare as hen’s teeth, you
might decide to update your exchange rates just before you record each transaction
that uses a foreign currency. However, you may also opt to update exchange rates
on a regular schedule, such as daily or weekly. If your home currency is US Dollar,
you can download the latest exchange rates from within QuickBooks whenever you
want. You can also fill in rates manually. Here’s how:
• To download exchange rates, simply choose Company→Manage Currency→
Download Latest Exchange Rates. QuickBooks downloads rates for the currencies that are active in your Currency List (see page H-4).
• To manually record exchange rates, choose Lists→Currency List. In the Currency
List window, double-click the currency you want to edit. In the Edit Currency
window’s table, fill in the first blank row with the exchange rate’s effective date
and rate.
Recording Transactions in Foreign
Currencies
When you record transactions in foreign currencies, you have to fill in a few additional fields: the exchange rate for the foreign currency and, if necessary, the A/P
Account field for bills or the Account field (with the Accounts Receivable account)
for invoices. Behind the scenes, QuickBooks uses the exchange rate to convert
transaction amounts into your home currency. This section describes how to record
foreign-currency transactions such as bills and invoices.
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QUICKBOOKS 2016: THE MISSING MANUAL
Entering a Bill in a Foreign Currency
When multiple currencies are turned on, the Enter Bills window sports the A/P Account field to the right of the Bill and Credit options. In addition, when you choose
a vendor assigned a foreign currency in the Vendor drop-down list, the window
displays the vendor’s currency in several places, including the window’s title bar
and to the right of the vendor’s name, as shown in Figure H-3.
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
FIGURE H-3
When you choose a
vendor, QuickBooks fills in
the A/P Account field with
the Accounts Payable account associated with the
foreign currency that the
vendor uses. QuickBooks
displays the currency in
several places (labeled
here).You fill in amounts
in the foreign currency.
QuickBooks displays the
bill amount in your home
currency below the
Amount Due field.
Here’s how to record a bill in a foreign currency:
1. Download the most recent exchange rates for the currencies you use.
See the previous section to learn how to download and enter exchange rates
into the Currency List.
Appendix H: Working with Multiple Currencies
H-7
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
2. In the Enter Bills window’s Vendor drop-down list, choose the vendor who
sent you the bill, just as you would for a bill in your home currency.
QuickBooks automatically changes the A/P Account field to the vendor’s currency, as shown in Figure H-3.
3. In the Amount Due box, type the bill’s value in the foreign currency. In the
Expenses and Items tabs’ Amount cells, type the amounts in the foreign
currency.
Below the Amount Due field, the program displays the currency code for your
home currency (USD in Figure H-3) and the bill amount in your home currency.
The Expenses and Items tabs both display the foreign currency’s code to indicate
that the values you enter are in that currency.
4. If the exchange rate in the “Exchange Rate 1 [currency code] =” box (below
the Expenses and Items tabs) is incorrect, type the exchange rate from the
foreign currency to your home currency.
In Figure H-3, the exchange rate converts Canadian dollars into U.S. dollars.
5. Click Recalculate at the top of the window.
QuickBooks recalculates the bill’s Amount Due in your home currency using
the exchange rate you entered.
6. Click Save & Close to save the bill.
To clear all the fields and start over, click Clear instead.
When you save a bill recorded in a foreign currency, QuickBooks updates your
books behind the scenes using the bill amount in your home currency. To see the
bill’s effects on your finances, in the Enter Bills window, click the Previous button
(the blue, left-pointing arrow) until you see the bill. Click the Enter Bills window’s
Reports tab, and then click Transaction Journal. The Transaction Journal window
displays the debits and credits for the bill in your home currency. For example, in
Figure H-4, QuickBooks credits the Accounts Payable – CAD account and debits
the Office Equipment account with the bill amount in U.S. dollars.
FIGURE H-4
When you record a bill in
a foreign currency, QuickBooks debits and credits
the accounts in your chart
of accounts using the
bill’s amount due in your
home currency.
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QUICKBOOKS 2016: THE MISSING MANUAL
Paying Foreign-Currency Bills
If you pay bills in more than one currency, you have to make a separate pass through
the Pay Bills window for each one. Here are the steps:
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
1. Choose Vendors→Pay Bills (or click the Pay Bills icon on the Home Page).
QuickBooks opens the Pay Bills window.
In the A/P Account drop-down list at the top of the window, choose the Accounts
Payable account for the currency in which you have to pay bills.
The bills you’ve recorded in that currency appear in the Pay Bills table. The
bill amounts appear in the foreign currency. As shown in Figure H-5, the total
amount you have to pay appears below the table’s Amt. To Pay column in the
foreign currency and your home currency.
FIGURE H-5
When you choose an
A/P account for a foreign
currency in the A/P Account field, the program
lists the bills entered in
that currency. It also fills
in the “Exchange Rate
1 <currency> =” field at
the window’s bottom
with the most recent
downloaded exchange
rate for that currency.
2. If you didn’t download exchange rates before you opened the Pay Bills
window or you want to change the exchange rate, in the “Exchange Rate 1
<currency> =” box, type the exchange rate you want to use.
When you click away from the field, QuickBooks recalculates the amount in
your home currency.
Appendix H: Working with Multiple Currencies
H-9
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
3. As you do for bills in your home currency, select the bills you want to pay
by clicking their checkboxes in the first column of the window’s table. Make
any other changes you want, and then click the Pay Selected Bills button at
the window’s bottom right.
QuickBooks records the bill payments in your home currency because that’s
the currency your real-world bank account uses. If the exchange rate changed
between the day you recorded bills and the day you paid them, you’ll have
currency gains or losses on your purchases. Jump to page H-15 for reports that
show currency gains and losses.
Recording an Invoice in a Foreign Currency
If you work with multiple currencies, the Account box that appears at the top of
the Create Invoices window shows the Accounts Receivable (A/R) account for the
invoice’s income. In addition, when you choose a customer who uses a foreign currency, the window displays its currency in several places, as shown in Figure H-6.
FIGURE H-6
When you choose a
customer, QuickBooks fills
in the Account field with
the Accounts Receivable
account associated with
the customer’s currency.
QuickBooks displays the
currency in several places
(circled).
A foreign-currency invoice has a few extra fields compared to a single-currency
invoice. Here’s how you fill one out:
1. Download the most recent exchange rates for the currencies you use.
See page H-6 to learn how to download and enter exchange rates into the
Currency List.
2. In the Home Page’s Customers panel, click the Create Invoices icon; or, in
the Customer Center toolbar, choose New Transactions→Invoices.
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QUICKBOOKS 2016: THE MISSING MANUAL
3. In the Create Invoices window’s Customer:Job box, choose the customer
or job.
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
In the Customer:Job drop-down list, the last column shows the customer’s or
job’s currency. Once you choose the customer from the drop-down list, QuickBooks automatically fills in the Account field with the A/R account for the customer’s currency; in Figure H-6, for example, that’s Accounts Receivable – JPY.
4. In the Invoice # box, fill in the invoice number, if necessary.
QuickBooks remembers the last invoice number used for each A/R account in
your QuickBooks chart of accounts, so you can create unique invoice numbering
schemes for each of them. To make foreign currency invoices easy to spot, you
might include the currency code at the beginning or end of the invoice number,
such as 1000-JPY. That way, the program automatically assigns invoice number
1001-JPY to the next invoice you create for that account.
5. If the exchange rate in the “Exchange Rate 1 [currency] =” box below the
line-item table isn’t correct, type the exchange rate you want to use.
When you choose a foreign-currency customer or job in the Customer:Job
drop-down list, QuickBooks automatically fills in the exchange rate field with
the most recent exchange rate for that currency and uses that rate to convert
item prices into the foreign currency.
To use a specific exchange rate for an invoice, fill in the “Exchange Rate 1 [currency] =” box with the exchange rate before you add items to the invoice. (If
you forgot to change the exchange rate before adding items, delete the lines in
the invoice, adjust the exchange rate, and then add the items again.)
6. Fill in the rest of the invoice’s header fields and rows in the line-item table
as you would for a home-currency invoice (page 222).
When you add items to the table, QuickBooks uses the exchange rate to convert
the item’s price or rate from your home currency into the foreign currency. See
the box on page H-13 to learn how to set up a price list for a foreign currency.
7. Click Save & Close to save the invoice.
Or click Clear to clear all the fields and start over.
When you save an invoice recorded in a foreign currency, QuickBooks updates your
accounts using the invoice amount in your home currency. The invoice you print to
send to the customer shows values in the foreign currency, as shown in Figure H-7.
Appendix H: Working with Multiple Currencies
H-11
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
FIGURE H-7
Although the Create
Invoices window shows
the exchange rate and
the customer’s currency
in several places, the
printed invoice displays
the currency only for the
invoice total.
TIP You can’t record foreign-currency statement charges for customers or jobs directly in a foreign-currency
Accounts Receivable account’s register window. Instead, choose Company→Make General Journal Entry, and then
record the charge as a journal entry. (You can also open the Make General Journal Entries window by clicking Edit
Transaction in the Accounts Receivable window’s toolbar.)
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QUICKBOOKS 2016: THE MISSING MANUAL
RECORDING
TRANSACTIONS
IN FOREIGN
CURRENCIES
POWER USERS’ CLINIC
Building Foreign-currency Price Lists
Suppose you’ve developed a price list for your products and
services in a foreign currency and you want to distribute that
list to your customers in a far-away land. When you create
invoices in that currency, you want to use the prices from
that list, not prices based on the most recent exchange rate
for that currency.
If you have QuickBooks Premier, you can set up a price level for
that currency and specify set foreign-currency prices for each
item you sell in that currency. Here’s what you do:
4. In the Price Level Type box, choose Per Item. (This entry
is grayed out if you use QuickBooks Pro.)
5. In the Currency box, choose the currency for the price
level—in this case, Japanese Yen.
6. The Item table’s Standard Price column displays item
prices in your home currency. In the Custom Price cell for
each item on your foreign-currency price list, fill in the
item’s sales price in the foreign currency.
1. Choose Lists→Price Level List.
7. After you fill in all the custom prices, click OK to save
the price level.
2. In the Price Level List window, right-click the list and
choose New from the shortcut menu.
8. Assign the price level to customers who pay you in that
currency (page 137).
3. In the New Price Level window’s Price Level Name box,
enter a name for the price level, such as Currency JPY for
Japanese Yen.
With the currency price level assigned to your foreign-currency
customers, QuickBooks automatically applies that price level to
every item you add to their invoices, as shown in Figure H-8.
FIGURE H-8
When you assign a price
level to a customer,
QuickBooks automatically
applies that price level to
every item you add to an
invoice for that customer.
A foreign-currency price
level can specify
foreign-currency prices for
individual items you sell.
That way, the program fills
in the Rate or Price cell
with a set price regardless
of the exchange rate.
Appendix H: Working with Multiple Currencies
H-13
RECEIVING
PAYMENTS AND
MAKING DEPOSITS
IN FOREIGN
CURRENCIES
Receiving Payments and Making Deposits
in Foreign Currencies
As you might expect, the key to receiving payments and making deposits in a foreign
currency is the currency’s A/R account. This section highlights what to do when you
receive payments and make deposits in foreign currencies.
Receiving payments in a foreign currency is easy. Here are the fields you have to fill
in for a foreign-currency payment:
• When you select a customer who is set up to use a foreign currency, QuickBooks
fills in the A/R Account box with the account associated with the customer’s
currency.
• The “Exchange Rate 1 [currency] =” box comes to life, filled in with the most
recent exchange rate in QuickBooks for the customer’s currency. If you want to
use a different rate, type it in this box. If the exchange rate you use when you
receive the payment is different from the rate when you recorded the invoice,
QuickBooks automatically calculates the currency gain or loss (page H-15)
behind the scenes.
• In the Payment Amount box, type the amount received in the foreign currency.
QuickBooks shows the Amount Due and the amount applied in the foreign currency.
At the window’s bottom right, the Amount Received is in your home currency. (The
program uses the value in the “Exchange Rate 1 [currency] =” box to calculate this
amount.) Click Save & Close to save the payment.
NOTE If you work with more than one currency, the A/R Aging reports and the Accounts Receivable Graph
use your home currency for all values. But you can modify the A/R Aging Summary report to see transactions in
the currencies in which they were recorded: In the report’s window, click Customize Report. On the Display tab
of the Modify Report dialog box that appears, below the “Display amounts in” label, select the “The transaction
currency” option, and then click OK.
Recording deposits for foreign-currency payments requires you to fill in two additional fields compared to their home-currency counterparts:
• In the Payments to Deposit window’s “View Payments for currency” drop-down
list (which you see only if you have multiple currencies turned on), choose the
currency, select the payments to deposit, and then click OK.
• In the Make Deposit window’s “Exchange Rate 1 [currency] =” box, type the
exchange rate that your bank used for the deposit (to find it, look at your bank
statement or review the transaction on your bank’s website). The window’s
table of deposits then shows the deposit amount in the foreign currency, and
the bottom of the window shows the deposit total in both the foreign currency
and your home currency.
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QUICKBOOKS 2016: THE MISSING MANUAL
NOTE Other foreign-currency transactions work similarly to the ones in the previous sections. In the Create
Statements window, choose the Accounts Receivable account for the currency that applies to the statements you
want to create. Repeat the statement-generation steps for each currency you use. The Make General Journal Entries
window includes boxes for currency and exchange rate. If you select an account that uses a foreign currency in a
journal-entry line, QuickBooks fills in the exchange rate and asks you to confirm that the rate is correct.
​T RACKING
CURRENCY
GAINS AND
LOSSES
Tracking Currency Gains and Losses
Changes in exchange rates can lead to gains or losses on your transactions. Say
you send a customer an invoice for 187,885 Japanese Yen when the yen-to-dollar
exchange rate is .008383 (that is, 1 Yen equals .008383 dollars). At that exchange
rate, the invoice total in your home currency (dollars, in this example) is $1,575.04.
However, by the time you deposit the customer’s payment, the Yen-to-dollar exchange rate is .008117, which means each Yen is worth fewer dollars. In this example,
your bank records a deposit of $1,525.06 in your account; you’ve lost $49.98 due to
currency exchange rate changes.
NOTE If an exchange rate increases, you get more dollars (or other home currency) for an invoice amount
in the foreign currency. That means you receive a gain due to the currency exchange rate.
To see how much you’ve actually gained or lost on foreign-currency transactions,
choose Reports→Company & Financial→Realized Gains & Losses. That report shows
gains and losses realized when you paid your bills and deposited customer payments.
Making Home Currency Adjustments
To report your financial results accurately, you have to adjust balance-sheet accounts
to show all your unrealized currency gains or losses based on the currency exchange
rates as of the report date. For example, you’ll do this at the end of a fiscal period to
bring your balance sheet accounts up to date before you close your books for that
period. Before you adjust foreign-currency amounts, the values you see in balance
sheet accounts are based on the exchange rates in place at the time you recorded
each transaction.
Unrealized gains and losses represent potential currency gains or losses based on
current exchange rates for bills you haven’t paid and payments you haven’t deposited.
In other words, you won’t know how much you gain or lose on a foreign-currency bill
until you pay it, and your currency gains or losses are unrealized until you deposit
a customer’s payment.
To see unrealized gains or losses based on the latest exchange rate, choose
Reports→Company & Financial→Unrealized Gains & Losses. In the Enter Exchange
Rates dialog box, type the exchange rates you want to apply, if necessary. When
you click Continue, the Unrealized Gains & Losses report shows gains and losses for
the balances in your A/R and A/P accounts, as shown in Figure H-9.
Appendix H: Working with Multiple Currencies
H-15
​T RACKING
CURRENCY
GAINS AND
LOSSES
FIGURE H-9
Until you pay a bill or
deposit a customer payment, your currency gains
or losses are unrealized.
That’s because they can
continue to change in
response to exchange
rates until you pay a bill
or deposit a payment.
The Unrealized Gains &
Losses report shows gains
or losses based on the
exchange rates as of the
report date.
To adjust account values, choose Company→Manage Currency→Home Currency
Adjustment. In the Home Currency Adjustment window’s Date box, select the date
for the adjustment (like the end of your fiscal year). Then choose the currency and the
exchange rate you want to use, and then click Calculate Adjustment. The customers
and vendors assigned that currency appear in the window’s table. Below the table,
click Select All or click the checkmark cell for each customer or vendor you want to
adjust. To save the adjustment, click Save & Close.
When you record your first home currency adjustment, QuickBooks creates an Other
Expense account called “Exchange Gain or Loss.” In addition, the program creates
journal entries to adjust the values in your foreign-currency Accounts Payable and
Accounts Receivable accounts. That way, in a Balance Sheet report, A/R and A/P
account balances include your home currency adjustment.
When you run a Profit & Loss Standard report (page 448), the “Exchange Gain or
Loss” account appears in the Other Expense account section. If the account balance
is a positive number, the adjustment is a loss. If the account balance is negative, the
adjustment represents a currency gain.
H-16
QUICKBOOKS 2016: THE MISSING MANUAL