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Foreign Currency Transactions

Foreign Currency Transactions

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We import goods from the EU, Switzerland and the US.

Each month we update the exchange rates on our ERP system (SAP) for the following month based on the HMRC Exchange rates.

However in recent months I have noticed that the HMRC rates are not always an accurate reflection of the true rate meaning large forex gains and losses when I revalue the currency accounts at the month end rate.

Question is do we need to use the HMRC exchange rates because of Customs and VAT records or can we use a commercial rate (for example from Oanda).

I spoke to HMRC and they basically suggested we could do what we want but they only recommend using the monthly HMRC rate.

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By njpandya
30th Oct 2015 21:57

Various

There are various options:

 

Use BOE exchange rate table & print a copy for your records; in case when auditors wish to see from where exchange rates were taken.You could also use xe & oanda which gives historical rates of exchange rates, only ensure keep records of them.

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By tom123
01st Nov 2015 08:09

Previously used bank rates / now use oanda

In my prior job, (UK subsid, Canada parent) we used rates provided by the bank (which was Bank of Canada in our case).

In my current role, I use OANDA - which is handy as you can select the dates quite easily.

I just keep copies in the month end files.

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By David Treitel
01st Nov 2015 13:31

Which OANDA rate do you use - bid or ask?  Do you use the Interbank rate or plus what percentage?

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By Golfemmo
05th Nov 2015 11:00

FX


Be consistent. If you use the BOE rate or the FT rate or HMRC stay with that source. As Tom 123 sad keep a copy of your source for Audit etc.

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By Golfemmo
05th Nov 2015 11:01

FX

Apologies to Tom 123 should have  written said not sad

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