Explaining what the intercurrency conversion account is - Revision history

Arvind at 10:59, 7 April 2023

2023-04-07T10:59:27Z

← Older revision		Revision as of 10:59, 7 April 2023
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	=== Example ===		=== Example ===

	You debit a bank with 100USD and credit a client account with 367AED, perhaps using it to pay off some AED invoices. ~~You~~ base currency is USD and there are no exchange gains/losses on this transaction		You debit a bank with 100USD and credit a client account with 367AED, perhaps using it to pay off some AED invoices. Your base currency is USD and there are no exchange gains/losses on this transaction

	#DR Bank 100USD/Base currency 100		#DR Bank 100USD/Base currency 100

Steve at 11:22, 25 February 2018

2018-02-25T11:22:27Z

← Older revision		Revision as of 11:22, 25 February 2018
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	=== What is the intercurrency account for? ===		== What is the intercurrency conversion account for? ==

	The intercurrency a/c is an automatic account maintained by NEOSYS that represents internal currency conversion where there are no exchange gains or losses and therefore always balances to zero.		The intercurrency a/c is an automatic account maintained by NEOSYS that represents internal currency conversion where there are no exchange gains or losses and therefore always balances to zero.

Steve: 3 revisions

2008-07-31T21:26:11Z

3 revisions

← Older revision	Revision as of 21:26, 31 July 2008
(No difference)

Steve: /* What is the intercurrency account for? */

2007-03-25T11:31:25Z

What is the intercurrency account for?

← Older revision		Revision as of 11:31, 25 March 2007
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	The intercurrency a/c is an automatic account maintained by NEOSYS that represents internal currency conversion where there are no exchange gains or losses and therefore always balances to zero.		The intercurrency a/c is an automatic account maintained by NEOSYS that represents internal currency conversion where there are no exchange gains or losses and therefore always balances to zero.

	The intercurrency ~~accounts~~ balance in base currency should always be zero and therefore never appear in financial statements for all currencies consolidated to base currency.		The intercurrency account's balance in base currency should always be zero and therefore never appear in financial statements for all currencies consolidated to base currency.

	As long as the intercurrency account base currency balance is zero then all is ok. Having balances in actual currency is normal and to be expected for the following reason.		As long as the intercurrency account base currency balance is zero then all is ok. Having balances in actual currency is normal and to be expected for the following reason.

Steve at 11:30, 25 March 2007

2007-03-25T11:30:22Z

← Older revision		Revision as of 11:30, 25 March 2007
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	=== What is the intercurrency account for? ===		=== What is the intercurrency account for? ===

	The intercurrency ~~accounts balance in base~~ currency ~~should~~ always be zero ~~and therefore never appear in financial statements~~.		The intercurrency a/c is an automatic account maintained by NEOSYS that represents internal currency conversion where there are no exchange gains or losses and therefore always balances to zero.

	As long as the intercurrency account base currency balance in zero then all is ok. Having balances in actual currency is normal and to be expected for the following reason.		The intercurrency accounts balance in base currency should always be zero and therefore never appear in financial statements for all currencies consolidated to base currency.

			As long as the intercurrency account base currency balance is zero then all is ok. Having balances in actual currency is normal and to be expected for the following reason.

	=== So why is it needed? ===		=== So why is it needed? ===
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	#DR Bank 100USD/Base currency 100		#DR Bank 100USD/Base currency 100
	#CR Client ~~100AED~~/Base currency 100		#CR Client 367AED/Base currency 100

	NEOSYS actually automatically creates the voucher with two additional lines in the intercurrency account		NEOSYS actually automatically creates the voucher with two additional lines in the intercurrency account

	#DR Bank 100USD/Base currency 100		#DR Bank 100USD/Base currency 100
	#CR Client ~~100AED~~/Base currency 100		#CR Client 367AED/Base currency 100
	#CR Intercurrency A/c 100USD/Base currency 100		#CR Intercurrency A/c 100USD/Base currency 100
	#DR Intercurrency A/c ~~100AED~~/Base currency 100		#DR Intercurrency A/c 367AED/Base currency 100

	The additional two lines merely reverse the first two lines but into the intercurrency conversion a/c.		The additional two lines merely reverse the first two lines but into the intercurrency conversion a/c. The balance of the intercurrency a/c in base currency is zero.

	The net effect is that every currency individually balances to zero so we can get individual trial balances for each currency separately and still balancing to zero.		The net effect is that every currency individually balances to zero so we can get individual trial balances for each currency separately and still balancing to zero.

Steve at 11:20, 25 March 2007

2007-03-25T11:20:28Z

New page

=== What is the intercurrency account for? ===

The intercurrency accounts balance in base currency should always be zero and therefore never appear in financial statements.

As long as the intercurrency account base currency balance in zero then all is ok. Having balances in actual currency is normal and to be expected for the following reason.

=== So why is it needed? ===

NEOSYS not only keeps the trial balance in base currency balancing to zero but also the trial balance of each currency balancing to zero.

When you do intercurrency transactions eg paying off invoices in one currency with receipts in another currency AND THERE ARE NO EXCHANGE GAINS AND LOSSES then NEOSYS will put a series of entries in the intercurrency account so that the total posting in any individual currency also balances zero.

=== Example ===

You debit a bank with 100USD and credit a client account with 367AED, perhaps using it to pay off some AED invoices. You base currency is USD and there are no exchange gains/losses on this transaction

#DR Bank 100USD/Base currency 100
#CR Client 100AED/Base currency 100

NEOSYS actually automatically creates the voucher with two additional lines in the intercurrency account

#DR Bank 100USD/Base currency 100
#CR Client 100AED/Base currency 100
#CR Intercurrency A/c 100USD/Base currency 100
#DR Intercurrency A/c 100AED/Base currency 100

The additional two lines merely reverse the first two lines but into the intercurrency conversion a/c.

The net effect is that every currency individually balances to zero so we can get individual trial balances for each currency separately and still balancing to zero.