Converting Foreign Currency into Australian Dollars

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I am using Reckon Accounts Personal Plus 2015. The income and bank balance is not being converted into Australian Dollars based on the downloaded exchange rates. How can this be corrected?
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Brian

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Posted 5 years ago

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Deny Dharmawan, Alum

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Hi Brian,

Please check the Currency List from Tools > Currency List. Does it show the correct currency rate?

If it's not. Please check Online > One step update. Make sure the Download currency exchange rates option is ticked.

Regards

Deny Dharmawan

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Brian

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Hi Deny,
When I go into  Tools>Currency list I get an exchange rate of 0.51045 = A$ for the UK pound. However when I go into the Historical tab this show as 2.19717 for all the download dates from 6/2/2010 to 6/3/2015. This equates to A$1= pounds 0.45513. So the historic rate is not changing even though each time exchange rates are downloaded they show a changed exchange rate. As a result the cash balance in Australian dollars remains the same and also the income in Australian dollars also remains the same even though the A$/UK pound exchange rate has changes over time. Can you please advise why this is so?
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Deny Dharmawan, Alum

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Hi Brian,

I would like to check a few more things. The cash balance should use the rate in the Currency List (0.51045).

When you mention Historical tab, you were referring to the Historical Rates right? It is not normal for it to have the same rate for 5 years. The Historical Rates for the UK could be damaged.

Please create a backup before trying below steps.

  • Create a new currency for UK pound, using the same Currency Code: GBP.

  • Do one step update for currency update.

  • Link your account to the new currency. Right click on the account, click Edit.

Then check the balance again.

Regards

Deny Dharmawan

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Brian

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Hi Deny
I now have different Historical exchange rates for the English pound/Australian dollar in the Historic rates. However the system is still not converting English pound amounts for income, expenses and the bank balance into Australian dollars using historic rate dates. 
I have checked some and found that the system is converting all English pounds transactions at the latest downloaded exchange rate not the exchange rate at the time of the transaction or nearest the transaction date. It would appear that if I continue to download the "update rates" that the system will reconvert all the English pound balances at the latest downloaded exchange rate. How do I get the system to pick up and convert at the historical rates?
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Brian

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Hi Deny
Have you been able to come up with some suggestion to solve the problem as outlined in my last post?
If not it is not possible to use Reckon to record overseas income in Australian Tax returns as the latest rate is used rather than the historical rates at the dates the income is received.
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Jason Beaven, Alum

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Hi Brian,

As you have discovered, the reports in Reckon Accounts Personal Plus can only use the current Exchange Rate not Historical Exchange Rate when using Foreign accounts.

I can suggest a workaround;

That is to export out your report to Microsoft Excel and recalculate the figures.

Regards,

Jason.
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Brian

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Hi Jason,
It also seems that Deny has also now discovered this fact. That means that Reckon is useless for using overseas currency for tax purposes if the currency is held in an overseas bank account before being transferred to Australia. UK pensions are usually required to be paid into a UK bank account by the UK HM Revenue & Customs. This could result in problems for people using the Reckon Australian Dollar figures to fill in their tax return in Australian Dollars as the ATO has set exchange rates for converting overseas income.
Using the current exchange rate also makes it inaccurate for monitoring asset values due to currency changes, so net worth reports will also change as they will use the current exchange rate. Again something that will cause a headache in comparing reports that will change and on the surface with no apparent reason.
This really seams like a fault in the programming as all historical Australian dollar reports will change due to using the current exchange rate. 
I did not buy Reckon to have to do currency conversions to complete my tax return and give me these sorts of surprises on reports. It means that my reports will constantly change in Australian dollars for the overseas currency amounts. What plans are there to correct this problem so historical values remain the same in Australian Dollars ? 
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Brett Rix

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I have been wondering why I have been getting continuously changing results for my self managed superfund running through Reckon.  Despite running reports as of 30 June, each day the result changed.  Now I know why.  For some reason beyond any logic, all reports as of a point in time translate foreign currency denominated balances at the latest recorded exchange rate.  Had I not found this thread, I would have almost certainly made errors in my annual accounts for the fund, with consequential errors in member balances and future pension requirements.  Lots of legal non-compliance would have followed.  Reckon Accounts personal plus is not fit for purpose if it is not able to perform proper point in time foreign exchange translations.  I'll be inquiring about whether Xero can do this.  if so, I have no choice but to shift across if this is not fixed immediately.
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Brian Barker

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Hi Brett,

From past posts you can see I have experienced the same problem as you in having reports change due to currency movements.

Now that tax time has come around this can create problems. I was also under the impression that I would be able to run Reckon reports for overseas income and this would enable me to use them in my Australian tax return. As the latest exchange rate is used in Reckon this is not in line with ATO requirements, so overseas income has be downloaded in foreign currency then converted based on the ATO exchange rates to complete ATO returns.

I think that many people, with overseas income, would be using  Reckon reports to prepare their tax returns. As a number of commentators have advised people to invest overseas due to the falling dollar I do not believe you will not be alone with this problem.

I totally agree with your comments. What is a concern is that Reckon do not warn you that the system is not suitable for recording overseas transactions. Perhaps they are going to pick up the all non-compliance costs as a result of the Reckons currency deficiencies.

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Narky One

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Yes, how RAPP behaves for xrate history is worse than useless in the extreme. Makes no sense regardless of how you look at it. And it has been like this for eons, with no hint of a fix from Reckon.

If having your reports use the exchange rate(s) as at 30 June is adequate for you, you CAN achieve this by manually entering (temporarily) the 30 June rate as a new exchange rate for today [and in some non-visible place something akin to latest], create the reports [which will use that today's rate], then delete the temporary exchange rate. I do this to get portfolio wealth as at 30 June. Use this method: Tools | Currency List | RtClick the rate in question | Edit | type in the rate in one of the bottom two entry boxes. Other methods to enter the xrate might not give the desired result in the reports.
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Brett Rix

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I worked that trick out the other night - it is an OK workaround for balance sheet items, but still leaves you up the creek with respect to the income statement items.  Why does Reckon ask you (or invite you) to record transaction-specific exchange rates for each FX denominated transaction?  It clearly doesn't use that information other than for recording the $A value of a transfer between an $A and $FX account.
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Brett Rix

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Brian, you wish!  I was hoping that the replies from my post may have been from someone in charge and accountable for the product with a promise to resolve the failure. Alas no!
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Brian Barker

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Brett, I hope you have completed your 2014/15 tax return. I am trying to do so and have run the Reckon report that also has income and expenses that contains overseas income and expenses. Each time I go into the report the overseas income & expenses keep changing due to Reckon working off the current exchange rate of the day.

What is concerning is that Reckon does not issue a warning to users that they can not complete their ATO tax return based on the reports Reckon produces. AS the A$ has dropped over the year the current Reckon reports show a increasingly higher A$ amount based on current exchange rates compared to the rates applying during the year.

Using the ATO link below the average rate for July 2014 was A$=UKpds0.5703, so UK pds 1,000 was =A$1,753. For the average rate for June 2015 the rate was A$=UKpds0.5166, so UKpds was =A$1,936, difference of A$183 more income.  I believe that Reckon currently is using a rate of A$=UK pds 0.4761, so UKpds1,000 is now worth A$2,100, an increase of A$347 from June 2014, or a depreciation of 19.8% in the A$. So if you rely on Reckon for your overseas tax income it appears you are going to be overstating your income significantly.

So Reckon needs to put out a warning if you have any assessable overseas income then you should not be using Reckon at all. This is borne out by the fact the report you use will show differing A$ income over the same period as the A$ moves, so it will probably not match the figure used in your tax return.


https://www.ato.gov.au/Tax-professionals/TP/1-July-2014-to-30-June-2015/


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Narky One

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Brian said: "So Reckon needs to put out a warning if you have any assessable overseas income...". Surely far better, one might think mandatory, would be to have changed the program to work sanely, sometime in the last 10 or 15 years or so; or even to change it to work sanely sometime this year. The same applies to the many other very nasty yet subtle bugs.
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Brian Barker

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Narky One, fully agree with you. Do not understand why Reckon have not fixed this bug by now. Appears from Jason Beaven's "solution  comment" above that they want everyone to export reports into Excel then recalculate things using the historic exchange rates at that time. This is simply not practical if the category includes a number of foreign currency items mixed in with A$ ones.

I think a lot of people will be wondering why their saved reports with foreign currency change each time they are looked at again. At first it drove me nuts until I managed to sort it out. The solution appears to be to dump Reckon and move to another programme  that solves this problem.

  

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Narky One

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Yes, but which other program to move to?
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Brian Barker

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Do not know, so it may end up being an excel spreadsheet for everything.
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Brett Rix

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I have found one reliable work around - use your banks statements and rebuild your income statement manually in excel!  I know Xero can handle multiple currencies, and translate them properly, but you need to go with one of their more expensive options plus separately subscribe for a share portfolio solution - so the cost starts to get up there.  Has anyone looked at the Reckon One on-line solution?  
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Brian Barker

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Thanks for your suggestion Brett. It can however get a bit cumbersome as some account categories have A$ and UK pounds transactions and there is more than 1 bank account is involved.

Just hope that people are not using Reckon to do their overseas income for tax purposes. If they get a tax query and run reports again the information will not balance with that in the tax return figures.