multicurrency-and-fx

name	multicurrency-and-fx
description	Use when implementing IAS 21 multicurrency accounting: functional currency, presentation currency, transaction currency, exchange-rate tables, settlement, realised and unrealised forex gains or losses, revaluation, and currency-safe ledger design.
metadata	{"portable":true}

Multicurrency And FX

Acknowledgement: Shared by Peter Bamuhigire, techguypeter.com, [phone].

Use When

• A tenant books in one functional currency but invoices, pays, or receives in another currency.
• A group needs presentation currency reporting.
• Month-end FX revaluation is required.

Hard Rules

• MUST define one tenant functional currency.
• MUST store transaction currency and functional-currency equivalent on journal lines or linked valuation records.
• MUST not mix functional and presentation currency as if they are the same ledger amount.
• MUST revalue open monetary items at period end where required.
• MUST distinguish realised from unrealised forex gains/losses.

Currency Model

Track:

• Functional currency: primary economic environment of the tenant.
• Transaction currency: currency of invoice/payment/document.
• Presentation currency: reporting currency where different from functional currency.
• Rate source, rate date, rate type, and approval status.

Posting Patterns

Foreign currency invoice:

• Post AR/AP and revenue/expense using transaction-date rate in functional currency.
• Preserve transaction-currency amount for settlement and subledger ageing.

Settlement:

• Clear AR/AP at original functional-currency carrying amount.
• Post cash at settlement-date rate.
• Difference goes to realised forex gain/loss.

Month-end revaluation:

• Revalue open monetary items at closing rate.
• Difference goes to unrealised forex gain/loss and revaluation adjustment.
• Reverse or update according to the tenant close policy in the next period.

Outputs

• Currency policy.
• FX-rate schema.
• Revaluation job design.
• Realised/unrealised FX posting matrix.
• FX reconciliation report.