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Foreign Currency Transactions

Foreign Currency Transactions

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A very small client sells on Amazon , all transactions in USD, problem is no bookkeeping in place and I have to do annual accounts plus tax return.

Question is how do I account for Currency exchange differences( gain /loss), as Amazon reports just show total fortnightly sales, charges/fees and deposit amount to client. Ideally exchange rate difference should be calculated as difference between rate on day of sale and the rate money was received by client. Similarly exchange rates differences for expenses/fees.

Obviously this is not possible due to lack of bookkeeping, was thinking to work our exchange rate difference as rate for the day on Amazon report and rate when money hits bank account?

Any suggestions please ?thanks in advance.

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By Hugo Fair
24th Jul 2021 20:01

Is your problem that there "is no bookkeeping in place" or that "Amazon reports just show total fortnightly sales, charges/fees and deposit amount to client"?
Or was that just for info and you're only interested in how to calculate "exchange rate differences"?
On that latter point you seem to have broadly answered your own question.

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Replying to Hugo Fair:
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By Adzuk
24th Jul 2021 20:13

I think everything :(
In short interested to know the best practice to calculate exchange rate differences in this situation.
I assumed you agreed on my point " to work our exchange rate difference as rate for the day on Amazon report and rate when money hits bank account?
TIA

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Replying to Adzuk:
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By Hugo Fair
24th Jul 2021 20:18

Yes ... but not because it's optimal or even 'correct' - merely because I can't see any other option (as they appear to be the only sets of actual figures you've got)!

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Replying to Hugo Fair:
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By Adzuk
24th Jul 2021 22:03

Thank you

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Melchett
By thestudyman
24th Jul 2021 20:20

Do they sell on amazon.co.uk or amazon.com? Would have thought if UK, all transactions are in GBP

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Replying to thestudyman:
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By Adzuk
24th Jul 2021 22:04

sells on Amazon.com :)

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Replying to Adzuk:
Melchett
By thestudyman
26th Jul 2021 10:35

If the client is uk based is their a good reason they sell on .com? If not, then it would simply make everyone's lives easier if they sold on the UK platform.

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By paul.benny
25th Jul 2021 16:49

I'd just convert to GBP on receipt of cash. Anything else is a ton more work for negligible benefit. There is no management benefit from recording exchange diffs

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