How can I adjust/match the Home Currency amount with the Foreign Currency while creating a JE?

In the Journal Entry module, there is a flag “Home Currency Adjustment” required to adjust/match the Home Currency amount with the Foreign Currency.

Why do we need Home Currency Adjustment?

When a business uses multiple currencies, the transfer of funds takes place between different accounts, for example, USD/CAD, etc., the fluctuation in exchange rates can cause differences in home currency equivalents for foreign amounts.

This issue can be fixed by doing the Home Currency Adjustment against the Exchange rate gain and loss account.

Below is an explanation with an example of how home currency adjustment works.

Please see the screenshot for reference.

  • Sales with fluctuations in exchange rate cause the difference in USD and CAD
  • ** see the Bank Deposit with a 1.1 exchange rate.

Hence, in order to match the home currency with USD, home currency JE is required.

In the JE module a flag for “Home Currency Adjustment” is introduced.

  • If the flag “Home Currency Adjustment” is unchecked, the “Journal Transaction View” will show the “Foreign Amount”.

  • While if the flag “Home Currency Adjustment” is checked, the “Journal Transaction View” will show the “Foreign Amount” column values as “0”.

Please Note:- The “Home Currency Adjustment” Flag can be updated for all the Accounts other than the “Account Receivable”. 

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