Foreign currency account balances in Wave
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Foreign currency account balances in Wave
When you have accounts set up in foreign currencies, transactions and reports can become confusing. Here are some tips for managing your foreign currency accounts.
When you run a business in multip...
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Hello,
should we adjust whole foreign transactions one by one or from time to time? Because every transaction has a loss in my case and currently my foreign balance is 0,97 CAD, but business currency is 21.87 USD which is quite weird. USD balance follows on its own from the starting balance. I'm very confused. Please help. Thank you
Hey @Senay , I don't think it makes a difference, as long as you are making the adjustments. As mentioned in the article though, your CPA or accountant may be able to give you the best advice on how often you should be adjusting these.
Hi Guys, this article is misleading and needs to be updated. We may want to have Wave support create revaluation entries even if the foreign balance isn't zero. This is standard practice and I request it all the time for year-end work, but I'm often referred to this article that suggests a super sloppy solution we can do on our own through three (!!!) separate 'revaluation' related accounts in the chart of accounts, two of which are already system accounts so it would become quite confusing when reading reports. If you don't want to bog down your support agents with these requests, then roll out the tool publicly so we can do it on our own
dear Alex,
Wave has generated a unrealized loss on foreign exchange in the BS and IS. But you can't access this account to eliminate it. The accounting is plain wrong. And I am a CPA so dont tell me to contact one. Wave generates FX transactions that can't be adjusted or eliminated even when the Balance sheet is agreed to the bank statement.
Then the instruction to : 'contact our Wave Support Team by clicking the blue question mark in the bottom right-hand corner of any page in Wave to request a Revaluation Entry.' is impossible to carry out because the Support Team does not exist!
I further investigated Wave's Unrealized Foreign Exchange (UFX) accounting and discovered more problems.
In one year net unrealized gains exceed losses by 3,610 thus increasing profits and resulting in tax been paid on this amount. In the following year the unrealized net loss was posted direct to reserves with no audit trail. So the company could not report the expense but had paid tax which is now unrecoverable.
In the current year Wave has generated 8,596 of UFX expenses in the Income Statement and has created a liability for a similar amount on the BS. Yet the net value of foreign currency assets on the BS is just $300. So the calculation is completely bogus. It is dubious whether differentiating between realised and unrealised gains is useful but Wave's methodology is completely broken. FAS 52 books realized and unrealized together.
Yet the users cannot access the UFX accounts to correct this nonsense. God knows how many Wave clients dealing in foreign currencies have been similarly misled by this incorrect accounting. And are unable to correct it.
Ive tried to contact support to get help but I am blocked by the stupid AI tool that understands FX accounting even less than the software engineers who created Wave apps.