Daily exchange rate or monthly exchange rate?

Software: MoneyWorks accounting software

Which exchange rate should I be using? Daily exchange rate or monthly exchange rate?

From the IRAS e-tax Guide “GST: Exchange Rates for GST Purpose”, which was published on 30 September 2013, stated that:

… The exchange rate must be the daily exchange rate corresponding to the time of supply. If not, it must be a good approximation of this rate;

Daily exchange rate refers to the prevailing buying rate, selling rate or average of the two. The use of the exchange rate on a particular day of the month (e.g. last working day of the previous month) or an average rate over a specific period (e.g. average of the daily rates for the previous month) to approximate the daily exchange rate corresponding to the time of supply is acceptable…

For me, I preferred to use the exchange rate of the last working day of the previous month (month end exchange rate) for my current month’s transaction. A home currency revaluation journal will be followed after the exchange rate is entered. If you are using MoneyWorks accounting software, the home currency revaluation journal is automatically created to adjust the foreign bank, accounts receivable and accounts payable account.

Highlight the currency from the Currencies list and click the “Set Rate” button to update the latest exchange rate.

MoneyWorks accounting software

 

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