JJD said:

it seems Sage does an automatic transaction if it finds a 0 balance at year end because it is quite obvious that if an account has $0 US funds in it, it must equate to $0 CA funds

If you choose to revalue your balance sheet at a different exchange rate, $0 USD will display as $0 CAD:

JJD said:

What are the journal entries to do this manually -

I don't think there is anything that automatically creates journal entries, so this is the only, manual way:

https://sagecity.na.sage.com/support_communities/sage_50_accounting_ca/f/148/p/100591/280104#280104

There is an official document somewhere that was written by Sage support, and there may even be something in the help.  I wrote that 10 days ago, without bothering to search.

JJD said:

I am a bit nitpicky with this, I would actually like to do this second type of adjustment monthly

I usually set it up as a monthly, recurring, G/L transaction.   IFRS rules may only require it at year end, and perhaps only if there is 'significant impairment' of the asset / liability.

I hope that helps, please post back.

Revalue only affects the balance sheet at that point in time? It's taking the balance in the currency of each acct and calculating the CAD amount on the fly, and 0 times any rate would be 0.

Whereas other reports are showing CAD balances as they were at the time each entry was set. Are those being calculated on the fly as well using the default rate for each day? Or is it presenting the stored data from each entry. Can we systematically go through and revalue each day by day with the then current rate? Will that cause general ledger amounts to be more reasonable? Or would we have to adjust each entry which should have had an exchange rate?

I am looking at general ledger at the PayPal USD account for the whole year in 'balance in currency of each account'. I can look down the Balance column and pick out easily which dates it was emptied, it shows - in balance column. If I switch to "balances in home and foreign currency" (more accurately "[balance in home] and [transaction amounts in home and foreign] currency" ) there is never any - in the balance column. Numbers are way off in CAD.

I guess this is because we do not enter a rate when the entry only affects USD accounts ? ie we pay a US vendor from PayPal USD, we leave the exchange rate at 1.00000 because in our mind there's no exchange involved. Should we always enter a rate when working with USD ?

Our "default rate for this day" are largely 1.0000 - we've been anwering no to saving it and just entering the rate on each transaction.

Revalue only affects the balance sheet at that point in time? It's taking the balance in the currency of each acct and calculating the CAD amount on the fly, and 0 times any rate would be 0.

Whereas other reports are showing CAD balances as they were at the time each entry was set. Are those being calculated on the fly as well using the default rate for each day? Or is it presenting the stored data from each entry. Can we systematically go through and revalue each day by day with the then current rate? Will that cause general ledger amounts to be more reasonable? Or would we have to adjust each entry which should have had an exchange rate?

I am looking at general ledger at the PayPal USD account for the whole year in 'balance in currency of each account'. I can look down the Balance column and pick out easily which dates it was emptied, it shows - in balance column. If I switch to "balances in home and foreign currency" (more accurately "[balance in home] and [transaction amounts in home and foreign] currency" ) there is never any - in the balance column. Numbers are way off in CAD.

I guess this is because we do not enter a rate when the entry only affects USD accounts ? ie we pay a US vendor from PayPal USD, we leave the exchange rate at 1.00000 because in our mind there's no exchange involved. Should we always enter a rate when working with USD ?

Our "default rate for this day" are largely 1.0000 - we've been anwering no to saving it and just entering the rate on each transaction.

JJD said:

Revalue only affects the balance sheet at that point in time?

JJD said:

I guess this is because we do not enter a rate when the entry only affects USD accounts ? ie we pay a US vendor from PayPal USD, we leave the exchange rate at 1.00000 because in our mind there's no exchange involved.

There is no currency exchange, but the accounting is in CAD$ and the money you're moving is not.  You need to enter an Exchange Rate to calculate the 'home currency' value of the transaction.   Just as you wouldn't treat 100 Mexican Peso as equivalent to $100 CAD, you shouldn't record U.S. exchanges as if they are at par.   Canadian and U.S. currency are both called a 'Dollar' but that doesn't mean they are the same thing.  Maybe if we referred to each U.S. Dollar as a 'Trump'?

JJD said:

Should we always enter a rate when working with USD ?

Yes.  The CRA has some guidance on which rates are acceptable to use.   We use the Bank of Canada Noon Rate, because here in Alberta it's available shortly after 10:00 AM.  I believe the CRA will allow using one rate for the entire month, which is less accurate but much simpler.

JJD said:

Numbers are way off in CAD.

You can't expect the CAD balance to be correct because the exchange rates for all the transactions will vary.  If you use a mixture of 'real' and '1.0' exchange rates, you might be off by a lot more.  The accounting between all the income and the foreign exchange 'comes out in the wash', so to speak, in the final net income - but in order to tell whether you're making / losing money on sales, versus on good / bad decisions about when to buy or sell foreign currency, you have to record each transaction at a reasonable exchange rate.

As I understand it, the accounting rationale for recording each transaction at the current exchange rate is that any exchange variation after that time is part of future exchange risk of not exchanging the currency into the CAD home currency, so therefore any prior rate variation has to be recorded as a permanent transaction because it's in the past.  It happened, it can't be changed now, it's a done deal.  The moving finger writes, and having writ moves on, and all that.  But to hold cash in a foreign currency, or a foreign currency receivable, or debt, is to take a risk on the exchange rate.