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Former Member

Bank Account in foreign currency

Hi Gurus,

We have two bank accounts in one bank, one in CAD and one in USD. CAD is company code currency. So should we create GL account for bank account in foreign currency in USD currency and select only balance in local currency or not? Please help me with this thank you.

Waiting for your response.

Thanks

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6 Answers

  • Posted on Dec 24, 2013 at 11:44 PM

    Hello, Mohit!

    I think that it would be appropriate to create two GL accounts - one for bank account in local currency and one for bank account in forein currency with foreign currency as account currency.

    If you indicate USD as an GL account currency you would not be able to mark the indicator "Only balances in local currency" at all. The system will issue an error message saying "Displaying balances in local currency is not defined for foreign currency accounts".

    Best regards,

    The Wirtschaftsmann

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 25, 2013 at 06:59 AM

    Hello Mohit,

    I think you need to create 2 G/L accounts that would be more appropriate

    Regards,

    Jignesh

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 25, 2013 at 11:12 AM

    Hi,

    Of course you have to have two bank accounts since you have to do bank reconciliation as well.

    create one GL Account with CAD currency( for this you can tick on only balance on local currency if you want to avoid any foreign currency gain and loss at the time of clearing ) and other one in USD.

    Regards,

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  • Posted on Dec 25, 2013 at 01:19 PM

    Hi Mohit,

    It is very simple to understand. As you said your local currency is CAD but you are trying to create a bank account in different currency USD, so no need to tcik "balance in local currency" because USD is not your local currency.

    This field is only for that account which is managed in local currency but might be chances to post in foreign currency, so avoiding any exchange rate difference at the time of clearing.

    The best example is GRIR account.

    Regards,

    Kalim

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 27, 2013 at 02:52 AM

    Hello Mohit

    If your issue resolved by above input can you Kindly give feedback and close this thread as answered.

    Thanks,

    Jignesh

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  • author's profile photo Former Member
    Former Member
    Posted on Dec 27, 2013 at 05:37 AM

    Hi Mohit

    It would be better to create to different GL masters for different currencies

    since you have already mentioned company code currency is CAD so the bank accounts for this Currency ,for this you can tick on only balance on local currency if you want to avoid any foreign currency gain and loss at the time of clearing and for USD bank account create a GL master with currency USD without tick on only balance on local currency

    Hope it will help you to solve your issue.

    Regards

    Praveen

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