Video: What is accounting for foreign exchange transactions
2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:46
Practically every company has various currency transactions. And it’s a sin to talk about banking and other financial organizations, because here almost all activities are based on this type of activity. Of course, they need to be declared somehow. This is always done by the accountant, as well as the chief accountant. These people must have a special education in order to know how to properly organize the accounting of foreign exchange transactions. Otherwise, the enterprise or bank may experience problems with various services.
Accounting and analysis of foreign exchange transactions includes a whole organizational system that has its own rules, methods, and principles. For example, each action must be recorded on a specific account. So, on the 52nd, under the name "Currency accounts", such an operation as written off / sold foreign currency must be shown.
It should be said that at the legislative level there are absolutely no restrictions on the performance of procedures of this type between residents, as well as non-residents. But, accounting for foreign exchange transactions is very strictly controlled, andany mistake can be very costly. Therefore, every accountant must do their job very carefully.
Accounting for currency transactions has some peculiarities. First of all, this concerns the fact that there is a need to recalculate assets, as well as liabilities, into the national currency. You should also take into account exchange differences that are formed as a result of recalculation.
It should be noted that in any enterprise accounting for currency transactions should be performed in some cases. First of all, this applies, for example, when an enterprise buys or sells goods and services, the prices for which are indicated in foreign currency. That is, import operations are accounted for. The accountant creates a separate account on which he conducts all actions. For example, accounting for foreign exchange transactions should be organized when a business entity receives a loan in foreign currency or, conversely, repays it. There are also a huge number of examples of when such records should be kept, but, as practice shows, these situations are the most common.
By the way, accounting for foreign exchange transactions should be carried out at the current exchange rate, which is called "spot". That is, if the transaction was carried out on the 12th, and the accountant started work on the 14th, then it must be carried out at the rate of the 12th, that is, focus on the date of the transaction.
In the end, I would like to say that if you do not have a special economiceducation, then you will not be able to keep a record of foreign exchange transactions simply because you will not know how to do it correctly. In this case, it is impossible to just learn, here you definitely need to understand what needs to be done and how, for example, money is debited. That is why every company has an accountant who makes sure that all operations are carried out correctly and that no errors occur.
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