Handling Exchange Losses & Gains in NEOSYS: Difference between revisions
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(New page: Many a times, the foreign exchange rate fluctuates and hence there is a difference in the invoice currency amount issued or received as compared to the actual payment received or paid. He...) |
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Hence NEOSYS handles these differences and allots the amount to a Exchange Loss or Gain A/c. | Hence NEOSYS handles these differences and allots the amount to a Exchange Loss or Gain A/c. | ||
Below is an example | Below is an example: | ||
[[Image:exdi1.jpg]] | |||
A client is invoiced for 100STG / 700AED on 1/1/2007. On this date the exchange rate was 1 STG=7 AED | |||
[[Image:exdi2.jpg]] | |||
The | The client makes a payment for this invoice on 1/2/2007. However the exchange rate has changed to 1 STG=7.5 AED. Hence there is a profit of 50 AED when we receive this payment. NEOSYS automatically notices this and does the following: | ||
# Allocates the payment of 100STG | # Allocates the payment of 100STG = 750AED to the invoice in the client a/c | ||
# Credits the 50AED from the allocation which is overallocated to the | # Credits the 50AED from the allocation which is overallocated to the invoice | ||
# Debits the Exchange Loss or Gain A/c (EXDI in this case) | # Debits the Exchange Loss or Gain A/c (EXDI in this case) | ||
The following are the ledger printouts of all the accounts which | The following are the ledger printouts of all the accounts which were involved in this transaction: | ||
[[Image:exdi3.jpg]] | [[Image:exdi3.jpg]] | ||
[[Image:exdi4.jpg]] | [[Image:exdi4.jpg]] | ||
Revision as of 06:06, 17 November 2007
Many a times, the foreign exchange rate fluctuates and hence there is a difference in the invoice currency amount issued or received as compared to the actual payment received or paid.
Hence NEOSYS handles these differences and allots the amount to a Exchange Loss or Gain A/c.
Below is an example:
A client is invoiced for 100STG / 700AED on 1/1/2007. On this date the exchange rate was 1 STG=7 AED
The client makes a payment for this invoice on 1/2/2007. However the exchange rate has changed to 1 STG=7.5 AED. Hence there is a profit of 50 AED when we receive this payment. NEOSYS automatically notices this and does the following:
- Allocates the payment of 100STG = 750AED to the invoice in the client a/c
- Credits the 50AED from the allocation which is overallocated to the invoice
- Debits the Exchange Loss or Gain A/c (EXDI in this case)
The following are the ledger printouts of all the accounts which were involved in this transaction:
