I am an accountant at my firm. My query is that if we accrue for income receivable in USD and our operational currency is gbp how should I recongise the income when it's received. I would have accrued for this income over 2 months. However when it actually pays the fx rate will be different from the fx rate used for the initial accrual.
Ireland Accounting for accruals in different currency
- Thread starter Kay2020
- Start date
Normally you'd translate into GBP at the point of sale, using the exchange rate at time, then re-translate at the end of month 1 using the rate at that time. Then translate again at the point the payment is received at the end of month 2. That'll give you gains/losses on exchange. It's normal.
If there isn't much difference between the rate at the point of sale and the end of month 1, then you could probably just by-pass the re-translation at that point. But you'll need to do it when the payment is received.
If there isn't much difference between the rate at the point of sale and the end of month 1, then you could probably just by-pass the re-translation at that point. But you'll need to do it when the payment is received.
I 100% agree with approach I was doubting myself when I reviewing thr accounts really appreciated