Balance discrepancy in the account

Sangwon

Hi,
As you see in the attached screen shot, Euro balance is 0 but CHF balance is 92.98.
This is Euro account and actual balance is ZERO so I think both balance should be ZERO. I am seeking your advice on how to fix this discrepancy. Thank you.

Barsin

Hey there @Sangwon

Manual Fix

When a foreign currency bank account reaches a zero balance in the foreign currency, there is usually a home currency balance in the account, due to foreign exchange rate fluctuations over time as transactions are recorded. If you zero out the balance in the business currency by creating a journal entry (the other side is gain/loss on foreign exchange), Wave calculates a corresponding foreign currency amount which is then recorded into the balance of the account. This means that ultimately, either the account will show a business currency balance (which is a 'phantom' account balance on the balance sheet), or the account will hold a foreign currency balance (which doesn't appear on the balance sheet, but then the bank account can't be reconciled as there is a 'phantom' transaction in the foreign currency).

We're working to make it possible for you to be able to update the business currency balance of a foreign currency bank account without also creating a foreign currency transaction amount. This would prevent your balance sheet and/or the account to have a phantom amount.

A workaround is to create a related functional/home currency “valuation” asset account, where you can make entries in the functional currency only, so the net of the valuation account and the bank account will be correct. We're working on automating this process, but in the meantime, this must be manually done by you. If you have further questions on the accounting principles of this, please reach out to an accountant. The valuation account would need to be the same account type as the account which needs to be balanced. So if it's an asset account you're looking to revaluate, you can create an asset valuation account. Picture it like a placeholder account here you can store the balance away from your actual account. This is definitely a workaround and we appreciate your patience until we eventually give the option to change currencies in Wave.

Wave is currently building a transaction rewrite which will, in its final phase, include the tools needed to reconcile these ghost amounts. I don't have an ETA for this launch, but I can say that it is the current primary focus of the accounting product team. Thank you for your patience while we build this feature out to completion.