Discrepancies between Base and Foreign Currencies


By reviewing journal entries, it has been noticed that the base currency has a mismatch with the foreign rate, appearing to be incorrectly calculated.

Example:Account Currency balance in USD is $1,115,354.018 and showing as CAD $1,085,098.1719; but it should be $1,429,941.04871 CAD at a current system exchange rate of 1 CAD = 0.78 USD. Most of the exchange rates in the sample are between 0.70 and 1. There are no transactions with an exchange rate greater than 1. So how is it showing a balance greater than Base currency if there are no transactions with an exchange rate greater than 1?

Issue Clarification

As the calculation is done in a running balance and the transaction for the debit that have 1 as transaction rate have more occurrences compared to credit one, it caused the balance to be accumulated throughout the year.

See in this given example:

date rate debit credit balance debit_fex credit_fex balance_fex rate calc
1/1/2018 1.00 100 0 100 100 0 100 1.00
1/2/2018 0.70 0 50 50 0 35 65 1.30
1/3/2018 1.00 50   100 50 0 115 1.15
1/4/2018 0.70 0 50 50 0 35 80 1.60

Everest kept record for the transaction for each currency, base and foreign, and for each of these their own running balance where in the case for this account, the carried over amount have accumulated, causing the odd increase in the difference. 

In example given the ending balance are 50 for base currency while in the foreign currency it is 80, even though the last entry have 0.70 as exchange rate, the running balance rate was 1.60 in actual.


By default, Everest keep track of the separate amount for each of currency, one for base currency and the other one is foreign currency these caused an increase in the difference.

In order to reset this behavior, a suggestion is to clear out the balance by creating two journal that uses one journal entry out from account and one journal in entry, as an example please find the screenshots below that show switched rate with base currency of USD to CAD as foreign currency, with the current balance for the CAD account is CAD 70.00.



Credit: Raditya Perdevi



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