accuarate conversion of historic foreign exchnage rates
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Greg Plummer
Member Posts: 4 ✭
Is there any Reckon product that accurately converts foreign exchange transactions at actual historic FX rates instead of the current FX rate that applies when a report is produced ?
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Comments
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whatever you find you need to understand that the exchange rate that's published - e.g. in xe.com will be the sell rate not the buy rate, nor the rate that the bank uses when it processes your transactions.
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Thanks, the real problem is that Reckon applies an exchange rate on the day you produce the report even though the transaction may have occurred at a significantly different exchange rate many months earlier. Thus the period end conversion is wrong, interest received /paid , dividends, gain or loss is incorrectly reported in AUD0
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Hi Greg,
Welcome to the Reckon Community.
Could you elaborate a little further so that we can determine what sort of problem may be occurring and how to work around it.
regards,
John
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John, Thanks for your reply. The problem is perhaps best illustrated by an example. If I buy a foreign share, say USD, I record the purchase in USD. I later sell the same share resulting in a USD sale proceeds and profit or loss. When I prepare year end accounts / Tax returns, etc Reckon will convert the purchase, sale and profit/loss into AUD from USD at the date I produce a report instead of converting at the actual historic exchange rates applying when the share was purchased and sold.0
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Thanks Greg,
By what you describe the P/L on the share trade is still in USD dollars. When you run the report RAP will use the latest currency rate it has to revalue the USD amount to AUD (the home currency) for reporting purposes. The P/L is still in USD. While you keep the P/L in USD you are facing a foreign exchange risk as the currency rises and falls from day to day.
RAP is behaving as intended.
Please speak to your accountant what is the best way to report on your foreign currency trades. In RAP the only way to recognise the exchange rate on the day the trade is closed out is to transfer the funds from a USD account to an AUD account on the day.
I hope this explains the workings around foreign currency based share transactions.
regards,
John.
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