Just looking for a bit of advice on how to record foreign currency transactions. I've sent out invoices in Euros, Swedish krona and Polish zloty - the funds are all being returned to a Euro account. Once received the funds will be sent to our charity partner in Canada and will never hit our sterling account.
I assume I do the following:
Debit A/R with the respective invoice amounts converted to sterling using the spot rate on the invoice date credit Income account
Debit euro cash account with amount received Credit A/R
debit currency gain income account credit A/R
(or vice versa if a loss)
then at month end, if the money is still sat in our euro account, I presume I calculate the value in sterling using the month end spot rate and post to an unrealised asset account?
