We use transaction based parallel currency where accounting currency is in GBP and parallel currency is in USD. Currency rates for both accounting and parallel currency are updated monthly. In this scenario, transaction and accounting currency are the same (GBP). When posting receipt of goods in Month1, Inventory is debited and GRNI is credited. In Month2, the supplier invoice debits GRNI and credits AP, however, the GRNI amount in parallel currency is different due to a new currency rate, thus the amount in the GRNI account is not fully reversed in parallel currency. What is the recommended solution to manage these balances when this can potentially affect thousands of transactions? A gross month-end adjustment? There is concern this creates another set of books to reconcile every month, adding more work for the users.
Best answer by VCookView original