Revaluation of Foreign Currency Balances in QuickBooks

All foreign currency exchange rates are held historically in QuickBooks, and as we have learned already, these rates may change daily. Exchange gains/losses are calculated automatically at the point of payment.

When an invoice has been created for a foreign customer, a rate stored in QuickBooks will be used to calculate the Home Currency Value. If several months have passed, and the balance of that invoice remains unpaid, the value of that invoice in the home currency may have increased or decreased.

In this section, you will learn how to use the tools within QuickBooks to revalue foreign currency balances and how those revaluations impact the financial reports.

Within the drop-down ACTION menu of any currency listed within Currencies, you will find the option to Revalue currency:

Figure 7.24 – The Revalue currency option

Let's take an example where our home currency is GBP, and we...