Previous year currency gain losses are changing in P&L
We have discovered that our previous year P&L is changing due to currency gain/loss when we apply vendor credits or customer credits against bills input into current year.
We receive advance deposits from clients for goods prior to delivery and also make advance payments to vendors for goods to be manufactured for future delivery. These advance payments are received or sent in EUR (into EUR denominated bank accounts, and remain in that currency).
When transactions cross over from one calendar year to another we have found that the currency gain/losses is changing from previous year (changing P&L and balance sheet) when we finally accept delivery of the goods and post a bill and link it to the credit residing in AP or AR in the vendor or customer account.
If, say, we go back today and run a P&L and Balance sheet for the year end of 2017 it is different from the reports we sent to accountants to prepare taxes.
At the year end we are performing home currency adjustment as we should when all transactions are in for the year (in this case 2017).
If we go back and open home currency adjustment page - we can see that the differences in currency gain/loss are due to those entries where we've used a credit on AP or AR in the next year. And if we do the home currency adjustment again (using the same exchange rate that was used at year end) this corrects the problem and our P&L comes back to it's original condition at year end.
This is quite tedious and time consuming - worrying that previous year end financials are not fixed and are a moving number. Just does not seem correct to us.