Foreign Transaction Import
Foreign currency conversion is supported in Simple Fund 360. There are a few ways transactions in foreign currencies can be fast uploaded.
1. The BGL XML importer (Bank Transaction type only). Transactions can be recorded in the file using foreign currencies and Simple Fund 360 will convert upon upload. Refer to BGL Excel (XML) Import for more.
2. The Data Entry Spreadsheet. Select a foreign currency and import foreign transactions simply via copy & paste the CSV data to the spreadsheet. Refer to Data Entry - foreign currencies for more.
3. The BGL SmartDocs. Similar to the Data Entry Spreadsheet mentioned above, where users can select a foreign currency, the BGL SmartDocs further improves efficiency by allowing bank statements to be uploaded without any manual entry of transactions. Refer to BGL SmartDocs for more.
Transactions must be recorded in Australian Dollars (AUD) in Simple Fund 360.
Under the ATO's general translation rule, all tax-relevant amounts (income, expenses, obligation, consideration, values, payments, and receipts) that are denominated in a foreign currency must be translated into Australian currency. This enables all gains and losses to be calculated using a common unit of measurement – the Australian dollar.
Foreign exchange (forex) regulations have been made which may allow for the translation of foreign currency amounts into Australian currency or an applicable functional currency using:
- average rates
- daily rates, or
- rates consistent with the rates used in the preparation of an audited financial report.
Please refer to the ATO Website for more information.
Where can I find foreign exchange rates ?
The Foreign Currency screen provides you with the ability to search for currencies and their exchange rates for specific dates.
BGL has opted to use the official end of day exchange rates from the RBA instead of those provided by the ATO.
This is due to the ATO not providing daily rates, not providing timely data, not providing daily rates older than 2 years and not providing data which is easily machine-readable. You will have the ability to overwrite the conversion rate
Alternatively, average rates are published on the Tax Office website. Here you can find lists of exchange rates for selected countries including average monthly and yearly rates. Alternatively, you can use appropriate exchange rates provided by a banking institution operating in Australia including, where relevant, the banking institution through which your foreign income is received. You can also use rates published by another reliable external source. The rate used and the source of rates should be kept with your records. The Reserve Bank of Australia (RBA) provides official exchange rates on its Website
How to record Foreign Bank Accounts
You can create a bank account as per normal through the Chart of Accounts.
Check out the help on how to create this account, see Recording Foreign Cash Investments.
How to record a Foreign Exchange Gain or Loss
Create expense and income accounts to record the foreign currency losses and gains respectively.
The expense account needs to be created within the 30000 range and income account needs to be within the 20000 range in the Chart of Accounts.
For detailed instructions on how to add an expense or income account in Simple Fund 360, refer to the help. Click here.
Select a tax label based on the individual requirements of the account.
Currently, in Simple Fund 360 you will need to manually calculate the Foreign exchange gain or Loss.
|From the Main Toolbar, go to Accounting.
|Select Transaction list
|Select the New Transaction.
To record unrealised movement related to this Foreign Bank Account, typically resulting from changes to the exchange rate, post a Debit or Credit to the Foreign Bank Account offset by posting to 24700/Changes in Market Values of Investments.
If the value of the Foreign Currency increases by $500 AUD, the following transaction applies:
|24700/Changes in Market Values of Investments
From the General Journal screen post adjustments to asset/investment and Debit/Credit the expense or income account which were created in the "Add Income and Expense Accounts to record Foreign Exchange Gain/Loss" section above.
$1000 USD is disposed of and transferred back to the Australian bank account.
- $1000 USD is worth $1500 AUD at the time of transfer, resulting in $500 Foreign Exchange Gain:
|20000 range account - Forex Gain
However, a Foreign Exchange Loss of $500 on disposal would result in the following transaction:
|30000 range account - Forex Loss
BGL does not provide accounting or taxation advice. This article is designed to act as a guide for Simple Fund 360 users. It is not designed to be accounting or tax advice and should not be taken as a strict guideline. Other methods that are more suitable may be used instead of these steps.