Ireland Accounting for accruals in different currency


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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.
 

Fidget

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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.
 
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Joined
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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.
I 100% agree with approach I was doubting myself when I reviewing thr accounts really appreciated
 

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