Rounding Gain/Loss Using Different Exchange Rates
In this example, your U.S. subsidiary receives a vendor bill of $19,028.88 (Canadian). When you enter the bill, the exchange rate from Canadian to U.S. dollars is 0.76374051, and $14,533.13 (U.S.) is credited to accounts payable. The amount posted was rounded to two decimal places from the calculated amount of $14,533.1265159288.
GL Impact of the Bill
|
Account |
Debit |
Credit |
|---|---|---|
|
Accounts Payable |
|
14,533.13 |
|
Lumber Expense |
14,533.13 |
|
When you pay the bill in full in Canadian dollars, the exchange rate is 0.76295. The $19,028.88 (Canadian) converted to base currency is $14,518.083996, or $14,518.08 (U.S.) rounded to two decimal places.
The realized gain on the payment is equal to the payment rate less the source transaction rate multiplied by the payment amount. The variance is (0.76295 – 0.76374051) × $19,028.88 (Canadian), which is –$15.04251993 or –$15.04 (U.S.) rounded to two decimal places.
Because NetSuite posts the rounded amount, the GL Impact pages for the bill and the bill payment are different.
GL Impact of the Bill Payment
|
Account |
Debit |
Credit |
|---|---|---|
|
Checking |
|
14,518.08 |
|
Accounts Payable |
14,518.08 |
|
Foreign Currency Variance Mapping is enabled in your account, so a separate currency revaluation is created and linked to the vendor bill.
GL Impact of the Currency Revaluation
|
Account |
Debit |
Credit |
|---|---|---|
|
Realized Gain/Loss |
|
15.04 |
|
2000 Accounts Payable |
15.04 |
|
At this point, the accounts payable account is unbalanced.
|
Transaction |
Debit |
Credit |
|---|---|---|
|
Vendor Bill |
|
14,533.13 |
|
Bill Payment |
14,518.08 |
|
|
Realized Gain/Loss |
15.04 |
|
|
Total |
14,533.12 |
14,533.13 |
Another currency revaluation transaction is created to balance accounts payable.
GL Impact of the Currency Revaluation (Rounding Gain/Loss)
|
Account |
Debit |
Credit |
|---|---|---|
|
Rounding Gain/Loss |
|
0.01 |
|
2000 Accounts Payable |
0.01 |
|