UK Intercompany Accounting - Fx


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Hi All,

I was wondering if someone could help me with a query I had regarding intercompany balances with two different currencies.

Say for example I had an intercompany account between a Spanish and Swedish entity - The Spanish entity had a Dr Balance of €100 and the Swedish entity had a Cr balance of 110 SEK. If there was 1.1 SEK to every EUR, the two entities would balance. However, say the exchange rate changed to 1.2 SEK for every EUR, the two intercompany accounts now wouldn't balance. In what entity would I make the adjustment to make them both balance? and why?

Many thanks in advance.
 
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kirby

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