If you have accounts payable or accounts receivable in a foreign currency, you may need to keep track of the effect of changes in exchange rates on your foreign balances.
Note: Home currency adjustment is only available in QuickBooks Online Essentials and Plus
What is a home currency adjustment?
How do I create a home currency adjustment?
Home currency adjustments change the home currency value of your foreign balances, recalculating them based on a new rate. These adjustments affect your balance sheet accounts.
Until you recalculate the home currency value of your foreign balances using current exchange rates, your reports show the home currency value based on the exchange rates you used at the time of each transaction.
At the end of a reporting period, when you need your financial reports to show a current home currency value of your foreign balances, you can enter a home currency adjustment.
We show the effect of a home currency adjustment to accounts payable or accounts receivable as an unrealized gain or loss. We show the effect of a home currency adjustment to other account types, like bank accounts, as a realized gain or loss.
Tip: We recommend that you work with an accounting professional before entering these adjustments.
Note: Home currency adjustments do no affect foreign balance accounts.
You must have multicurrency turned on to be able to create home currency adjustments.To create a home currency adjustment:
- In the top right corner of QBO, Click the Gear (⚙) menu.
- Under Lists, select Currencies.
- Find the currency you wish to make an adjustment for and in its Action column, click the downward-pointing arrow.
- Select Revalue currency to bring up the revalue screen.
- Select a date (today or a day in the past) to run a currency revaluation.
- Select whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
- Select the account(s) you want to apply the revaluation to.
- Click Revalue.
Important: For your books to stay accurate and compliant, we can only save one exchange rate per day per account. We use this exchange rate to calculate unrealized gain and/or losses.
Troubleshooting home currency adjustments