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FX ERRORS in Inventory Received But Not Billed acccount

edited Apr 17, 2009 3:11AM in Accounting / ERP 11 comments

When you receive an item purchased in a foreign currency, the Item Receipt transaction posts a value to the "Inventory Received But Not Billed" account based on the FX rate used in the P.O.

But when the item gets billed, a new FX rate is entered as of the bill date. So when the bill gets entered a different value gets removed from the "Inventory Received But Not Billed" account.

This causes a FX variance that remains in the "Inventory Received But Not Billed" account permanently. This is wrong. 

If you import stuff from abroad that has a long lead time and the FX rate has changed on you - watch out - you may have significant FX gains or losses that remain hidden on your balance sheet.

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