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Hello everyone,
I’m facing an issue with ledger settlement and the handling of opening transactions in a multi-currency environment, and I’d appreciate any insights on whether the suggested approach is correct.
| Date | Year Closed | Type | Currency | Amount in Transaction Currency | Accounting Amount | Amount in Reporting Currency |
|---|---|---|---|---|---|---|
| 01/01/2025 | No | Opening | USD | -531 | -531 | 0 |
| 01/01/2025 | No | Opening | SGD | 752.15 | 531 | 0 |
It was recommended that I:
The issue you're facing arises from the way Ledger Settlement and Opening Transactions handle multi-currency balances, particularly when unmatched FX differences exist at year-end. Below is a structured approach to prevent and correct this issue effectively.
Before closing the fiscal year, always settle related transactions in Ledger Settlement. This ensures that any FX gain/loss is recognized in the correct period and does not roll forward unexpectedly.
✅ Steps:
Before year-end closing, run Foreign Currency Revaluation to adjust for any FX differences properly.
✅ Steps:
This ensures that any FX differences are accounted for and do not impact opening balances.
Transaction Posting:
On 01/06/2024:
Dr Prepayment (Balance Sheet Account)
Cr Bank (in SGD)
On 01/09/2024:
Dr Expense Account (Profit & Loss)
Cr Prepayment (Balance Sheet)
Transactions matched in Ledger Settlement.
Opening Transactions for 2025:
The system brings forward both transactions with different exchange rates, resulting in:
USD: -531
SGD: 752.15
This causes discrepancies in the opening balances.
If unmatched FX differences are still brought forward in Opening Transactions, consider these steps:
🔹 Option 1: Adjust Exchange Rates in the Opening Balance Calculation
🔹 Option 2: Create a Manual Adjustment Entry
If your system does not correctly process multi-currency settlements, consider:
Your suggested approach—using Ledger Settlement during the year and manually adjusting FX at year-end—is partially correct, but it can be improved.
By following these steps, you can ensure that FX revaluation differences do not unexpectedly appear in the new year.
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