Accounting entries at the time of Foreign currency valuation.

[Former Member]

Dear All,

I wanted to know about the accounting entries generated while doing a

a) Foreign currency valuation and

b) Automatic payment programme.

Please help me in getting the accounting entries for both the situations.

Thanks in advance!

Abhijit

[Former Member]

Hi Shilpa and Chintan,

Thanks for your immidiate response.

Shilpa, when are you saying while doing valuation in OBA1 for KDB types the entry is

Exchange loss acc dr 100

To Gl (SBI loan account) 100

Is it the Bank account you are trying to credit or any specific loan account you are trying to credit? Since you have mentioned as SBI loan account, I am bit confussed over here. Can we say it as bank account simply?

Hi Chintan,

Is it the only entry getting generated while doing the foreign currency valuation

Vendor Dr.

Bank GL Cr.

No entries except the above takes place at all?

Thanks to confirm.

Best regards,

Abhijit.

[former_member188028]

Hi,

Accounting entries for open item managed accounts:-

Unrealized exchange gain/loss Dr/Cr

Balance sheet Adj. account Cr/Dr

Accounting entries for non open item managed accounts:-

Unrealized exchange gain/loss Dr/Cr

GL a/c for which you are executing FCV Cr/Dr

Rgds

Murali. N

[Former Member]

Hi,

You have got answer of Accounting Entries for Forex Valuation in Thread by Ashilpa

For APP, there is no difference afterall it is payment regardless of effort so entry will be same

Vendor Dr.

Bank GL Cr.

Regards,

Chintan Joshi

[Former Member]

Hi,

1)

Foreign Currency valuation if we have done account assigment in OBA1 for KDB is

If loss then

Exchange loss acc dr 100

To Gl (SBI loan account) 100

If Profit then,

GL (SBI Loan Acc) Dr. 200

To exchange gain account 200

These entries will be reversed in the next month beginning if the valuation is done on a monthly basis.

If it is a year end valuation reversal will not happen.

2)

Foreign Currency valuation if we have done account assigment in OBA1 for KDf is, here we use the balance sheet clearing ccount along with the exchange gain and loss account.

If loss then,

Exchange loss Acc Dr 100

To b/sheet adj accoutn 100

If gain

B/sheet adj acc dr.

To exchange gain account.

Thanks,

Shilpa.