Revaluing foreign currency balances at month end

Foreign-currency invoices, bills and bank balances are recorded at the rate on the day they happened, but their value in your own currency moves with the exchange rate. A currency revaluation restates whatever is still open at a month-end rate, so that month's balance sheet and profit show what they are really worth. Run it just before you close the month.

What a revaluation does

For each open document and foreign bank account, it compares two figures in your own currency:

• Carrying — what it is held at now, from the rate it was recorded at.
• Revalued — the foreign amount still open, at your closing rate.

The difference is shown under Gain / (Loss). It is unrealised because no money has moved yet. For example, a USD 1,000 invoice recorded at 1.35 is carried at 1,350. At a closing rate of 1.32 it is revalued at 1,320, a loss shown as (30.00).

Before you start

• The currency must be switched on. See Working in more than one currency. Needs Multi-Currency on your plan
• Set Unrealised Exchange Gain/Loss GL Control Account on System Manager›Accounting Defaults. The gain or loss is recorded there.
• Confirm the month's invoices, bills, receipts and payments first, because a finalized revaluation locks them.
• Have the closing rate ready: usually the published rate for the month's last day, or your accountant's.

Run a revaluation

1. Open Cash Book›Currency Revaluation and click New Revaluation.
2. Set the Revaluation Date to the last day of the month you are closing.
3. Pick the Currency. Your own currency is not offered.
4. Type the Closing Rate: what one unit of that currency is worth in yours on that date.
5. Under Revalue, tick Receivables for what customers owe you, Payables for what you owe suppliers, and Bank & Cash for money held in that currency.
6. Check the preview: one row per open document or bank account, each with its gain or loss, and the total underneath.
7. Click Save Draft to come back to it later, or use the arrow beside it and choose Finalize.

Run one revaluation for each foreign currency you hold.

What finalizing records

• An adjustment for each row on the Revaluation Date, and a matching reversal the next day.
• Sales Reports›AR Aging and Purchases Reports›AP Aging run for the revaluation date show each document at its revalued figure.
• Documents in that currency and the sections you ticked, dated on or before the revaluation date, can no longer be added, changed or deleted.

The figures are then frozen. Print gives you a copy.

Change or undo a revaluation

A draft is recalculated each time you open it, and a document added since shows a New marker. The date and currency cannot be changed after the first save. To change them, delete the draft and start again.

To correct a finalized revaluation:

1. Open it from Cash Book›Currency Revaluation.
2. Click Release. Both adjustments are removed and it returns to Draft.
3. Correct it and choose Finalize again, or Delete it from the list.

What can stop you

• If Cash Book›Currency Revaluation is missing, your plan does not include more than one currency. Needs Multi-Currency on your plan
• If Finalize is greyed out, the Closing Rate is missing, nothing is ticked under Revalue, or every row's gain or loss is zero.
• If a warning says the currency already has a revaluation on that date, another revaluation covers the same section. Untick that section or change the date.
• If finalizing is refused for a missing account, set it on System Manager›Accounting Defaults.
• If finalizing or releasing is refused for a locked period, the revaluation date or the day after it is in a closed month. See Financial Periods.
• If releasing is refused, a later revaluation is finalized. Release that one first.
• If a document will not save because of a revaluation, it is dated on or before a finalized one in its currency. Release the revaluation, make the change, then finalize again.
• If deleting is refused, the revaluation is finalized. Release it first.