Negative balance sheet for foreign bank (Asset)

dontworryaboutit

Home currency is USD. I Have a CAD and USD bank. I transferred funds from my CAD to USD bank (CAD gained strength) and now my CAD bank shows negative (for USD) (its not). I have an entry in my P&L for "Loss on Foreign Exchange" but my CAD bank is still negative in the balance sheet.

How do I fix this?

Update:

The FX exchange loss was actually the fee the exchange company took when transferring between my CAD > USD account. The CAD account is still negative in my home currency (USD). I always zero out the CAD bank so this should be simple, since its negative in USD, I gained and will DR bank, CR FX revenue. If the bank was empty, but bookkeeping still showed money that means I lost money, and I would CR bank, DR FX loss

KristenV

Hi @dontworryaboutit !

This is a bit of an issue for foreign currency accounts in Wave, since all reporting is done in the base currency of your business. With foreign currency transactions, there are different rates used based on the invoice date vs payment date.

When a foreign currency account like this hits $0 and there's still a remaining "ghost" balance, we have a revaluation tool we can make use of to help correct this. If this is the case for you, please reach out to us via ticket/email and one of our Support Specialists would be happy to help get this sorted!

If your account isn't at $0, the tool wouldn't help us out here but we do have some other steps you can use to create a manual revaluation entry:

1. Head to Accounting>Chart of Accounts and create a new “revaluation” account. It should be in your default business currency and a “Cash or Bank” account type.

2. Compare the current account value (either on the Transactions (if reconciled) page or via an external source, like your online banking) to the “historical” account value (the value on the reports, such as the Account Transactions, Trial Balance, and Balance Sheet).
   

3. If you want to adjust the balance sheet to match the Transactions page, you would have to adjust the bank account by subtracting the historical value from the current account value. You'll want to make a journal entry or an income/expense transaction (depending on if the value needs to increased or decreased) to the Revaluation account:

Now, when you look at the balance sheet or trial balance, the sum of the original bank account balance + the revaluation bank account balance will equal the current translated balance. The gain (or loss) on foreign exchange will be on the profit & loss report as well.