# Additional Reporting Currency Issue

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.

You canâ€™t simply do the division as you have done to come up with a rate, as you essentially just dividing a final total. You are trying to average it out as if each line contributes equally to the equation. For example: GBP USD Ex Rate 1. -50,000 -95,375 (1.9075) 2. 60,000 111,042 (1.8507) 10,000 15,667 Using the equation you used below the rate calculated would be 1.5667, which is less than the two rates used above as one of the entries relates to neagtive amount. Hope this helps. Cheers Peter