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exchange gain/loss with reporting currency

in General Ledger & Intercompany 5 comments

Summary: how exchange gain/loss is reflected in reporting currency?

assuming following:

  1. 1st ledger in US with USD functional currency and EUR as reporting currency
  2. 2nd ledger in EU with EUR functional currency and USD as reporting currency
  3. GL journal is posted in EU ledger with entered currency USD
  4. Exchange rate between USD/EUR is changed and GL journal from line #3 is revalued creating gain/loss GL entry as:
    1. Entered currency USD: 0
    2. Functional currency EUR: 100
  5. Why this transaction in reporting currency USD is translated from EUR 100 amount?

this is messing up consolidated reporting in USD currency

Expectation would be that that transaction with entered currency USD will not be translated to reporting currency by use of exchange rate, but would simply take entered amount if entered currency match reporting currency

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