Multi-currency bookkeeping: every subsidiary keeps its own currency, and the group still reports in dollars.

Exchange differences

Realized and Unrealized Gains and Losses

Exchange rates move between the date of an invoice and the date it is paid. That difference has to be recorded.

• Realized gain or loss. Recorded when a foreign-currency invoice or bill is paid at a different rate from the one it was booked at.
• Unrealized gain or loss. The change in value of open foreign-currency balances, such as unpaid invoices or foreign bank accounts, at month-end.

Both QuickBooks Online and Xero calculate these when multicurrency is turned on and payments are recorded in the right currency. Recording a foreign payment in dollars by hand is the most common reason they come out wrong.

The group view

Reporting the Group in Dollars

1. Close each entity in its own currency and reconcile intercompany balances.
2. Translate each foreign entity’s results into dollars, typically balance sheet items at the month-end rate and profit and loss items at an average rate for the period.
3. Record the translation difference in equity, not in profit.
4. Eliminate intercompany balances and transactions, then review the combined reports.

Where we fit

How We Handle Multi-Currency Groups

We keep the books for groups of companies in QuickBooks Online, Intuit Enterprise Suite and Xero, including entities that work in other currencies. Each entity is closed on the same schedule, foreign-currency accounts and intercompany balances are reconciled every month, and group reports are prepared when you need them. Your CPA and local advisers keep tax and structure.