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yasbas
October 26, 2022
Question

Enter Owners Equity in a different currency to base currency.

  • October 26, 2022
  • 1 reply
  • 0 views

Hello,

 

My business is based in The Gambia and the local currency is GMD Dalasi. 

I want to enter Owners Equity into QBO which was in USD $. 

 

I've activated multicurrency but when I want to setup up The Owner Equity account in the Chart if Accounts there is no option to enter this in USD $.

 

Is this a QBO limitation or is there a way? 

 

It is critical to find out because all this will link to 'Retained Profits', 'profit sharing,' 'dividends' etc whch will all be in USD $. 

 

Thanks in advance. 

1 reply

MorganB
MorganB
October 26, 2022

Hello there, yasbas.

 

Thank you for taking the time to reach out for support here in the Community. I'd be glad to relay some info about using the multicurrency feature in your QuickBooks Online account.

 

After recreating this scenario in my test account, it looks like the currency for equity accounts can't be changed. However, you can change the currency for other account types. I recommend consulting with your accountant to find out which alternative account type would work best for you.

 

In the meantime, the following articles will help you get started:

 

With this info you'll be able to use USD for your account. Please don't hesitate to reach back out if you have any other questions.

Y
yasbasAuthor
October 28, 2022

Hi Morgan B,

 

Thank you for your response. Yes I came to the same conclusion. I had a think about it and would appreciate your feedback on the below;

 

 If I created a bank account in the currency of the equity investment (in this case USD dollars) and then transferred to the ‘owners equity’ account which in the base currency (GMD Dalasi), then anytime any company valuation is done it would be easier to account for currency fluctuations because QBO would automatically adjust for this right?

 

I did a little test of this to transfer the equity investment but it shows up as a negative figure. I’m assuming it is supposed to be negative because the company owes this investment back to the owner?

 

Thanks in advance for your feedback.

MorganB
MorganB
October 28, 2022

Thanks for getting back to me, yasbas.

 

QuickBooks provides a "Revalue" function when using the multicurrency feature. Here's how to do this in your account:

 

1. Click Settings ⚙️, then select Currencies.
2. Locate the currency you want to adjust.
3. Under the Actions column, select the small arrow ▼ icon.
4. Choose Revalue Currency.
5. Select a date (today or a day in the past) to run a currency revaluation.
6. Pick whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
7. Click the account(s) you want to apply the revaluation to.
8. Choose Revalue.

 

I'm linking the article that covers additional details on this process for you here: Enter home currency adjustments for your foreign balances

 

You know where to find me if you have any other questions. Take care!

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