Rate differentials in local / foreign currency

L.C and F.C Rate differentials can be recorded automatically in WizCount.

Rate Differentials Transactions are transactions that revaluates the L.C (NIS) Balance and the F.C Balance to create a match between the balances. NIS Rate differentials correct the NIS Balance to match the F.C Balance, while F.C Rate differentials correct the F.C Balance to match the NIS Balance.

Example: For a given card –

NIS Balance: 1400 NIS Debit

F.C Balance: $ 300 Debit

$ Exchange Rate: 4 NIS per $

 

Adjusting the F.C Balance to NIS yields: $ 300 times 4 NIS / $ = 1200 NIS. In order to reconcile the NIS Balance with the F.C balance, a Journal Entry is recorded for a Credit Amount of NIS 200. As a result, the NIS Balance will be 1200NIS, and it will match the F.C Balance ($ 300) and the exchange rate (4 NIS per $). This is a NIS Rate Differentials Action, it changes the NIS balance to match the foreign exchange balance.

Alternatively, the NIS Balance can be revaluated in foreign currency: NIS 1400 divided by NIS 4 / $ = $ 350. To reconcile the F.C Balance with the NIS Balance, a Journal Entry is recorded for $ 50 in debit. As a result, the F.C Balance will be $350, and it will match the NIS Balance (1400 NIS) and the exchange rate (4 NIS per $). This is a F.C Rate Differentials Action, it changes the F.C balance to match the NIS balance.

Rate Differentials can be recorded for an Account Card or Reference within the Account Card, where the Reference indicates a specific transaction (e.g. Travel agencies record Rate Differentials by file, where each file is indicated by a unique reference number).

Rate differentials: This section is used for choosing whether to record rate differential transactions in F.C (causing the software to update the F.C balances to reconcile them with the L.C balances) or record Rate Differentials Transactions in L.C.

Note: If the Account Card includes transactions in several currencies, the software calculates Rate Differentials for each currency.

Rate Differential Account: For each Account Card, you can specify the Rate Differentials Account (= the contra account in rate differential transactions for that card). This section is used for entering the Rate Differentials Account for transactions in Cards that do not have a preset Rate Differentials Account.

Dates: These fields are used to record the Reference date, Due Date and Additional Date of the Journal Entry.

References: These fields are used to record the Reference, Reference 2 and Reference 3 of the Journal Entry.

Costing Code: This field is used to enter the Costing Code to which the Rate Differential Transaction should be attributed.

Quantity: This field is used to update the amount that will be recorded in the journal entry.

Details: More details about the Rate Differential Transactions. If no details are entered, WizCount will enter Rate Differentials in this field.

 

Accounts / Transactions Filtering: These sections are used to select the filtering of Account Cards and Journal Transactions for which Rate Differentials Transactions will be recorded.

Batch: The Rate Differential Transaction will be recorded in a new batch opened automatically by WizCount. This section shows the Batch Number. You can choose another Batch from a Temporary file.

 

Registration method: The following sections are used to determine various parameters of rate differential transactions:

Rate differentials for: You can record Rate Differential Transactions by the Balance in the Account (as in the example above) or by the Balance in each Reference (where each Reference represents a transaction) or for each group of reconciled transactions (where each group represents a transaction). When calculating the Rate Differentials by Reference, you can select the Reference field – Reference, Reference 2 or Reference 3.

References having zero balance only: Enable this option so that the software will only record rate differentials when the Account or Reference Balance (i.e. the transaction) is zero.

Rate differentials calculation date: This section specifies the applicable date for retrieving the F.C rates that will be used in the rate differential calculations. The default date is the current date.

 

When done, click the Issue button.

 

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