Dear Experts,
We are currently evaluating the impact of IFRS 18 on our IFS setup.
One requirement is to classify foreign exchange differences into the categories Operating, Investing and Financing, based on the underlying transaction or balance. This means that FX revaluations on trade receivables/payables should be presented differently from FX revaluations on loans or investments. But there are edge cases, for instance when a supplier might be used for operating as well as investing activities.
I am interested to understand how others have approached this in IFS.
Our challenge is that the standard currency revaluation process posts unrealised FX gains/losses without an obvious distinction between the underlying business nature of the balance.
Questions:
- How have you differentiated FX revaluations between Operating, Investing and Financing?
- Did you solve this through separate accounts, posting control, code parts, account groups, reporting logic, or another approach?
- Are you able to derive the category automatically from the underlying balance sheet account?
- Have you implemented this already for IFRS 18 or are you currently analysing possible solutions?
I would appreciate hearing about both standard IFS solutions and any customisations that have worked well in practice.
Thanks in advance for your insights.