[phpBB Debug] PHP Notice: in file /includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead
[phpBB Debug] PHP Notice: in file /includes/bbcode.php on line 112: preg_replace(): The /e modifier is no longer supported, use preg_replace_callback instead
[phpBB Debug] PHP Notice: in file /includes/functions.php on line 4505: Cannot modify header information - headers already sent by (output started at /includes/functions.php:3706)
[phpBB Debug] PHP Notice: in file /includes/functions.php on line 4507: Cannot modify header information - headers already sent by (output started at /includes/functions.php:3706)
[phpBB Debug] PHP Notice: in file /includes/functions.php on line 4508: Cannot modify header information - headers already sent by (output started at /includes/functions.php:3706)
[phpBB Debug] PHP Notice: in file /includes/functions.php on line 4509: Cannot modify header information - headers already sent by (output started at /includes/functions.php:3706)
From Flames To Fork, Comes Freedom • View topic - Accounting Issues - IFRS Compliance, etc

Accounting Issues - IFRS Compliance, etc

The Financial Integration (FI) aspect of Compiere means Accounting Consequence, and stuff that makes Accountants rule. Well, IANA.

Moderator: lofx

Accounting Issues - IFRS Compliance, etc

Postby jaztek » Tue Sep 19, 2006 5:43 am

jaztek
 
Posts: 26
Joined: Mon Oct 04, 2004 7:06 pm
Location: London, United Kingdom

Postby croo » Thu Sep 28, 2006 6:54 pm

croo
Regular
 
Posts: 89
Joined: Sat Sep 02, 2006 6:53 pm
Location: Ireland

Postby jaztek » Fri Sep 29, 2006 6:00 pm

There ar ea number of issues with currency exchange but they can be classified as such:

1. What currency are your books accounted for in - this may be the currency associated with your country (such as GBP in the UK) but more correctly, this is specificed in your incorporation documents - usually the Memorandum of Association specifies share capital in a specific currency and hence the books are kept in that currency. Some countries allow dual currency books (these are called hyper inflationary economies) and there is a separate accounting standard about that.

2. Once the book currency is determined, the next issue is how are transactions recorded when they are not denominated in the same currency as the book currency. This is referred to as transacting currency - the issues here are a debt/obligation/right denominated in a currency that will be subject to gains and losses over time (relative to your book currency). Basically, the books are impacted for the unrelealised gain and losses over time until such time as the transaction is crystallised and then the gain/loss is crystallised.

3. We need to be mindedful of where the transaction referred to in 2 is not a transaction in the ordinary course of trade, but part of the financing arrangment of the business. This may be treated differently depending on your country of operation, your reporting country(ies) and how you interpret the reporting standards.

4. The final issue is reporting/comnsolidation currency, and this gives rise to unrealised gains and losses on the business combination (which has a different set of rules again). This problem is one dealt with very poorly by almost all companies. The issues are again different accounting standards and the fact that to get a good consolidation, you need to have kept not only the correct acquisition information (and someone who understands it needs to have worked out the correct consoidation entries in the right currencies), but also tracking of the balance sheet and earnings over time.

Each of these are an essay in themselves so I won't go in to depth here. I take it that your issue is about transacting exchange gain/loss realisation.

If you would like to talk a specific issue, let me know what you have, what jurisdiction you are in for transacting and reporting and we can take it from there.
jaztek
 
Posts: 26
Joined: Mon Oct 04, 2004 7:06 pm
Location: London, United Kingdom

Postby croo » Fri Sep 29, 2006 10:25 pm

Hi again Michael
thank you for the info ...
I think you points are more general and deeper.
My problems are more specific to compiere transactions. I had problems with some sceanrios causing imbalances in the Bank Intransit acount(s), and also an issue of unbalanced allocation when a non-book currency payment was created from the Bank Statement. And when I looked I the code to cehck these problem I saw other potential problems too... but until I have a adempiere to test it I'll leave further testing on hold!

colin
croo
Regular
 
Posts: 89
Joined: Sat Sep 02, 2006 6:53 pm
Location: Ireland


Return to Accounting Process

Who is online

Users browsing this forum: No registered users and 1 guest

cron