Home currency adjustment journal

Software: QuickBooks accounting software


It’s unbelievable! How can my exchange losses be S$45,000.00?

For those who never revalue their currency, they might get a shock at the unrealized exchange gains or losses amount when they first time doing their revaluation of currency (Home Currency Adjustment).

Usually we do the home currency adjustment monthly. First, you print your Unrealized Exchange Gains & Losses report to compare the current amount against your adjusted amount. Then, you pass a home currency adjustment journal to adjust your foreign Bank, Accounts Receivable and Accounts Payable account.

If your USD Bank had an opening balance of say US$100,000.00 with exchange rate of 1.7 SGD:1 USD (S$170,000.00). Now, when USD dropped to 1.25 SGD:1 USD (S$125,000.00); the differences will be S$45,000.00.

If you have lots of adjustment, suggest you get QuickBooks Premier 2011 Canadian instead of Pro version. Although, Premier cost more, it comes with a Home Currency Adjustment wizard, which ease your monthly Home Currency Adjustment routine.