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Xero bank revaluations

Anyone understand?

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For most clients using FX bank accounts I convert manually, but have one client who uses the multiple currency feature in Xero. I am getting a large entry to the P&L for 'bank revaluations'.   Xero does not allow drill down to this account to see what is behind the balance and there are dozens of merged posts on the Xero community site claiming that Xero is dealing with FX incorrectly, which is slightly worrying. 
 

On the Fx report, the bank revaluations are listed as unrealised gains.  The amount in question on the P&L account amounts to £1,011 (bank revaluations) for a Euro account with £10k in it.  It doesn't seem right  

 Reason for the post is that I was dubious as to whether this P&L gain was correct, so I did some research and it seems I'm not the only one, so does anybody know whether there is an issue with the way Xero deals with this?

thanks

 

 

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By johnt27
09th Apr 2020 20:14

Having used multicurrency Xero for a number of years I appreciate that the FX report can be both confusing and annoying. But, importantly, assuming the inputs are correct (FX rates and transactions entered in the correct currency) it does produce accurate figures. I also advise most of my clients not to handle FX manually anymore as they usually make a horlicks of it and why waste time doing so when it's automated!

Without seeing the detail it's hard to comment further but I would check opening balances are correct and using a reasonable FX rate (ie haven't been manually set to something random) and I'd also check for any rogue entries on the bank account. You can run a report showing transactions and their FX rates in Xero.

Xero do have a really good video on the FX report but I can't put my hands on it at the moment. Pretty sure it's part of the certificate training.

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By FRAM
27th Sep 2021 15:31

Xero calculate these revaluation taking any transaction in foreign currency and revaluating this to current rates, even for closed accounts.

I am sure Xero is calculating correctly but not sure if this is necessary? I am not aware you need to pay HRMC taxes on unrealised gains.

you can JV these out.

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