One of our clients has Additional Reporting Currency setup. The actual currency is GBP and the Additional Reporting Currency is USD. There is something that I noticed which I am struggling with a little bit now: I as looking at the Trial Balance for one account for the Month of May 05. The Net Change shows as 3000GBP and the Additional Reporting Currency shows as 1592.80USD. I found that to be odd so I drilled down to see what entries composed that amount. There are three entries: Amount Addtl. Curr. Amount Exchange Rate(calculated here only) 1.-50,000 -95,375 1.9075(-95375/-50000 ) 2. 12,000 22,208.40 1.8507 3. 41000 74759.40 1.8234 Now, if we total the lines AMount(GBP) is 3000 and Addtl. Reporting Currency is 1592.80. Technically the client is expecting that the total Conversion rate should fall somewhere between 1.82 to 1.90. But, the rate if calculated 1592.80/3000 comes to 0.5309. I am looking for some explanation here as to how the client can validate the exchange rate, as according to them now the exchange rate is not correct.
Hi Anu, Suppose Your 1. entry was made with -52.000 GBP, that would have given an even worse exchange rate. 1.000 GBP vs. -2.223 USD (Negative exchange rates must be real bad for world economics) The reason is that both negative and positive entries have been made to that account. If all negative entries are made with higher exchange rates, than the positive entries, and the Net change GBP still end up positive, it’s bound to give a “funny” exchange rate. You could perhaps create a report for Your client, in wich every account is presented twice. Once summing all negative entries, and once summing all the positive entires. Then Your client should be able to calculate an average exchange rate, for each of these lines. regards Alexander