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RE: Payables/Receivables in Foreign Currency. Is i...
# accounting
r
RE: Payables/Receivables in Foreign Currency. Is it possible to have an intercompany payable or receivable account set up in a currency other than the Subsidiary's currency? For example, if a USA Sub pays a CAD Sub, should the payable for the USA Sub's payable account be in $CAD? I'm thinking no, but I have a controller who disagrees.
k
It should be in whatever currency it's going to be transacted in. If it's never gonna be paid.. Then I dunno, ask your cpa
I'd want both sides of the transaction to have same currency so you can account for gain loss correctly
r
So how do you set up a GL payables account with a $CAD balance for USA Co if its base currency is USD?
It won't let me designate the currency on the Account setup.
k
Currency on an AP account is determined via transaction, not the account
r
So if the transaction is made in CAD by selecting the CAD Sub, there shouldn't be a problem...?
k
I was thinking someone was suggesting you transact part of it in one currency and the other in a different currency
Assuming you do the AR and the AP in the same currency it will get revalued according to your consolidated currency configuration
And everything is hunky dory
The question is whether you do it in USD or CAD on the transactions and I'm not CPA enough to tell you
r
So I booked it all through the CAD Sub, in CAD currency, and the GL impact was no different: The USA Sub had its payable balance expressed in its GL account as USD, not CAD.
k
correct - it will be converted for financial report purposes
r
So I have a controller telling me that the amount should be recorded in both USco and CADco's payable/receivable accounts in $CAD, even though NetSuite will not allow it to be expressed in $CAD in USco's payable account.
k
Your financial report can only be run in one currency. There is the ability to show the foreign currency amount in addition to the reporting currency
r
Right, probably with a Saved Search, correct? But one cannot post both US and CAD amounts into the same payables account. (And one does not seem to be able to create a $CAD payables account for a USD Sub.)
k
No - you should be able to post it to the same payables account
The currency has to be valid for the subsidiary/customer
or vendor rather.
r
But won't NetSuite always revalue it into USD once it hits that payables account?
k
NetSuite will always revalue foregin currency that's not in the Sub's currency
and it will always revalue your subsidiaries in the hierarchy according to the parent.
Even if you set up a seperate account for A/P for the different currency and only transact in that currency on your financial reports it will always be expressed in the report currency
r
Right. But the controller is telling me that he needs to see the $CAD value in the USco USD payables account, without it revaluing. Not possible.
k
Completely Impossible
Now - you might want to eliminate the intcompany gains and losses for a consolidation
which is definitely doable. but as far as the individual subsidiaries values - you have the intercompany gain and loss according to GAAP
Note - that's my understanding of US GAAP - not a CPA, so there might be exceptions I'm not aware of
and I konw it's slightly different in IFRS
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