Sunday, April 28, 2013

OpenERP 7.0 : Gain/Loss Exchange Rate Account

What is Gain and Loss Exchange Rate Account ? How We can use and configure it in OpenERP ?

To enable it, First install account_voucher module.

Go to the Settings --> Configuration --> Invoicing and In Features option, Tick 'Allow Multi Currencies'.

As soon as you will tick it, You will see 2 more account fields which are Gain Exchange Rate Account and Loss Exchange Rate Account.

Gain Exchange Rate Account should have Regular as Internal Type and Income as Account Type.

Loss Exchange Rate Account should have Regular as Internal Type and Expense as Account Type.

Scenario 1:

Suppose INR is base currency and USD has rate 50.00 in respect of INR.
I create an invoice of 1000 USD and validate it. Now before payment, I change rate of USD from 50.00 to 40.00.
After setting a new rate, I make a payment of it. After payment, I can see that Gain Exchange Rate Account will be credit with 5.00 amount.
1000/50 = 20 and 1000/40 = 25 means 25-20 = 5

Scenario 2:

Suppose INR is base currency and USD has rate 50.00 in respect of INR.
I create an invoice of 1000 USD and validate it. Now before payment, I change rate of USD from 50.00 to 60.00.
After setting a new rate, I make a payment of it. After payment, I can see that Loss Exchange Rate Account will be debit with 3.33 amount.
1000/50 = 20 and 1000/60 = 16.67 means 20-16.67 = 3.33

It means that Gain / Loss Exchange Rate Account will be updated on the base of Residual Amount.
If Residual Amount is > 0, OpenERP will consider Loss Exchange Rate Account for debit.
If Residual Amount is < 0, OpenERP will consider Gain Exchange Rate Account for credit.

Hope this post will help you, guys. See you later.

Cheers,
Priyesh Solanki

2 comments:

  1. Thanks for your post, it's useful. I have 3 other scenarios which are not solved by OpenERP v7.

    Supposedly, company currency = VND

    Scenario 1:
    - Supplier Invoice = 50 USD x 20,000 VND = 1,00,000 VND
    - First payment = 30 USD x 21,000 VND = 630,000 VND => lost 30,000 VND
    Problem: OpenERP does not handle exchange rate with partial payment

    Scenario 2:
    - Supplier Invoice = 50 USD x 20,000 VND = 1,00,000 VND
    - Fist payment = 40 USD x 25,000 VND = 1,000,000 VND => Invoice is marked as Done although I do not make full payment.

    Scenario 3:
    - Supplier invoice = 50 USD x 20,000 VND = 1,000,000 VND
    - Full payment = 37.5 EUR (USD/EUR =0.75) x 27,000 (EUR/VND) = 1,012,500 => Invoice should be Done since I make full payment = EUR but in fact, it does not.

    These 3 problems seem to be fixed based on this link
    https://lists.launchpad.net/openerp-expert-accounting/msg01281.html

    but it does not.

    Much appreciate if receiving some help from you :)

    ReplyDelete
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    Thanks for sharing this informative article. This content is very useful.
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    ReplyDelete