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Wave does not seem to calculate my realized or unrealized gains

mic294mic294 Member Posts: 3

Hi, I wonder if anyone could help, Wave does not seem to calculate my realized or unrealized gains on foreign exchange, I invoice in multiple currencies and also have bank accounts in those currencies, my base currency is GBP? I also use a commercial software package which accounts for realized or unrealized gains on foreign exchange correctly. What have I missed in Wave? Thanks Michael

in Accounting Technical Support

Comments

  • JulianPJulianP Member Posts: 1,002 ✭✭✭

    Hello @mic294 ! Thanks for reaching out. To clarify, when an invoice is approved, the bookkeeping will reflect the expected currency conversion rate on the date the invoice was approved. If you head over to your balance sheet, do you see an Unrealized Gain or Loss on foreign exchange entry?
    This entry will display whether the current conversion rate of the currency is more or less favourable than the day that you approved the invoice. Feel free to learn more about foreign currency invoices here.

  • mic294mic294 Member Posts: 3

    Hi @JulianP Thanks for your reply, i do not see any Unrealized Gain or Loss on foreign exchange entry in the balance sheet, I have also read the suggested article and I think I understand how its meant to work, if I put the same data into Freeagent (the package I'm using at the moment) I do get the expected FX entries.

  • BarsinBarsin Member, Moderator Posts: 2,041 ✭✭✭

    Hey @mic294

    The unrealized loss or gain account is actually for differences in the fluctuating foreign currency rather than the conversion.

    For example, let's say I, a USD company send you an invoice in GBP today and the exchange rate is 1 United States Dollar equals 0.77 GBP, Let's say you don't pay the invoice until 2 weeks from now, and the amount changes to 0.75 GBP. The unrealized loss account will likely appear here as there was a fluctuation in currency exchange rate.

    Is this what is happening on your invoices?

  • mic294mic294 Member Posts: 3

    Hi @Barsin

    Thanks for your help, all my expenses are in my base currency, I have now added an expense in a foreign currency and it seems to have kick started the unrealized loss or gain account, I then added an invoice and for the first time an unrealized loss or gain was added to the account for a fx invoice.

    I will play around and see how I go.

    Thanks

    Michael

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