Accounting for foreign currency transactions varies from country to country. In Canada, foreign currencies should be accounted for in Canadian dollars. 

If you use a U.S. dollar bank account in a Canadian set of books, you must record the balance and transactions in Canadian dollars using the exchange rate on that particular day. You can access exchange rates via your financial institution or the Bank of Canada’s online currency converter. 

We recommend creating two asset accounts and grouping them together. The first account will be used to track the balance of the U.S. bank account and the second account will be used to track the difference in foreign exchange.  

1. Click Chart of Accounts on the left. 

2. Click Add an asset account.  

3. Click the toggle to enable that the Account is part of a group.  

4. Select the drop-down menu under Group and click Add a new group account.

5. Type in an Account Number that is not in use in the Group Account Number field.  

6. Type in Foreign Exchange for the Group Account name. 

7. Select the Group Type Bank account.   

8. Enter an Account name for this account, such as U.S Bank. 

9. Click Save. 

10. Click Add an asset account again.  

11. Click the toggle to enable that the Account is part of a group.  

12. Select the new Foreign Exchange account from the drop-down menu under Group.  

13. Enter an Account name for this account, such as Currency Difference.

14. Click Save. 

You’ll need to set up an expense account in AgExpert Analyst to record your gains or losses on foreign exchange. 

1. In your Chart of Accounts first locate an available account number under the Administration section of your expenses. Click Add an expense account. 

2. Enter Gains on Foreign Exchange for the Account name.

3. Click Save.  

Last updated on December 19, 2019 by FCC AgExpert