Home Currency Adjustment on Reckon QuickBooks
Reckon introduced multiple currencies feature in QuickBooks* version 2003, which is much earlier than intuit QuickBooks US and QuickBooks Canadian version but slightly after Intuit QuickBooks UK.
Although all are ‘QuickBooks’, the multiple currencies feature are different. There is a Home Currency Adjustment wizard built-in in Intuit QuickBooks but not the Reckon version. You have to use a home currency adjustment journal to revalue the foreign currency accounts in Reckon Accounts (aka Reckon QuickBooks).
Assuming the home currency is Singapore dollar and you have a foreign receivable of US dollar 33 thousand at an exchange of 1USD:1.38SGD and the rate has changed to 1USD:1,35SGD at the end of January. The Singapore dollar receivable value has dropped from 45,540 to 44,550, which gives an exchange loss of Singapore dollar 990.
Instead of manually calculating the exchange gain/loss adjustment, you can print an Unrealised Exchange Gain/Loss report from the Reports menu (under the Multicurrency report section) to find out the unrealised gains and losses to adjust.
Then based on the Unrealised Exchange Gain/Loss report, record a home currency adjustment journal into QuickBooks.
The Unrealised Exchange Gain/Loss report shows only the total Singapore dollar value of each foreign currency account instead of each foreign currency debtor or creditor. Therefore, you need to create a dummy receivable and payable for each foreign currency. For example, you create a dummy debtor, USD AR Adjustment, and use it to adjust the US dollar accounts receivable account.
From the Company menu, select Make General Journal, check the Home Currency Adjustment checkbox at the bottom of the journal and record the journal in Singapore dollar. On the first line of the journal, select foreign currency accounts receivable account, enter the loss of 990 under the credit column and select USD AR Adjustment in the name column. Next, debit 990 to the Exchange Gain/Loss Unrealised account and save the journal.
You need to reverse the Home Currency Adjustment journal on the following month to allow QuickBooks to calculate the exchange gain/loss between the invoice and payment when payment received. You can either manually pass a reverse journal or open up the home currency adjustment journal which you did earlier and click the Reverse button located at the top of the journal. From the monthly Profit & Loss report, a positive value indicating a loss in exchange unrealised in January; and a negative in February reversing the January adjustment.
The latest version of Reckon Accounts is 2018, contact Reckon or us if you like to upgrade your existing Reckon QuickBooks or Reckon Accounts.
*Reckon Accounts is formerly known as Reckon QuickBooks.