Many companies often hold bank accounts in different currencies, e.g. Euros or US Dollars.
On the Balance Sheet in Dimensions, these are reflected in their Sterling (GBP) equivalent.
Current accounting conventions state that any assets held by a company that are denominated in a foreign currency need to be restated on the Balance Sheet at the exchange rate ruling at the Balance Sheet date.
The Cash Book in Dimensions can be used to make these Revaluations.
Navigation
Click on the Financials tab.
Click on the Cash Book.
This will open a new window.
Click on the Currency Transfers button at the top of this new window.
The currency Transfers button is normally used to post a journal between Nominal Accounts designated in different currencies.
However, it also includes an option to post a Revaluation Journal.
Example
A company buys €1,000 for £900
Therefore the exchange rate that the Euros were bought at is 1000/900 = 1.11 € to £
The Sterling value shown for the euro bank account in the Balance Sheet is £900 at the time of the purchase.
At the Balance Sheet date, however, the exchange rate has moved to 1.21 € to £, and therefore €1,000 are now worth £826.45 (i.e. €1,000/1.21 = £826.45).
The Balance Sheet now needs to show a Sterling value of £826.45, with a loss on exchange of £73.55.
Revaluation
Tick the Revaluation Journal check box.
On the detail line, select the Euro bank Account, and the value of the gain or loss.
**IMPORTANT: A LOSS SHOULD BE A CREDIT AND A GAIN SHOULD BE A DEBIT**
Note: cannot enter a value in the EUR value box; this is because the value of Euros has not changed – it is still €1,000.
Post the second line of the journal to the Exchange Gain/Loss Account.