WE'VE MOVED!

We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Options

Multiple currencies Inome/Expense query

techietechie subscriber Posts: 4
edited January 2009 in Accounting and Financial Management

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?
· Share on FacebookShare on Twitter Share on Google+
Sign In or Register to comment.