Bank Revaluations work in a similar manor but calculate the differences on any bank balances held in non-£ accounts in Xero. You can run a report at any time to review these Gains/Losses in Xero; Reports > All Reports > Foreign Currency Gains and Losses.
One of the next things we wondered was; is the Xero Bank revaluation account a quote?
One answer is, anything presented to the customer prior to that is essentially a quote. From the sound of things, what you’re doing is fine and the Xero bank revaluation account is essentially an unrealised forex movement.
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.
Can I Journal to a bank account in Xero?
You can’t journal directly to a bank account in Xero but using a Receive Money is essentially posting a debit to the bank account, and the account (s) you use on the Receive Money are the credits in the journal. So your Statement Balance flows through correctly too, you’ll want to mark this opening balance transaction as reconciled manually.
Choose an unused account “Code” (we recommend “965”). Give the account a “Name” (we recommend “Dividends”). Ensure that the “Tax” drop-down menu shows “No VAT”. Tick to “Enable payments to this account” (this will allow you to use the Dividends account when explaining bank payments in Xero).
Is Xero dealing with FX wrongly?
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.
How do I add equity account in Xero?
Within Xero, click on your company name (on the top bar) until a drop-down menu appears. Select “Looking for advanced settings? ” at the bottom of the screen. Select “ Chart of accounts”. Select “Equity” in “Account Type” drop-down menu. Choose an unused account “Code” (we recommend “965”).
Within Xero, click on the “+” button (on the top bar) until a drop-down menu appears. Select the “Manual journal” option. Write an appropriate “Narration” to describe the journal (something like “Declare dividend payable to Shareholders”).
Thanks for your assistance It is definitely an Equity type account. I use Code 965 but you can please yourself so long as it is an Equity entry.
Therefore, an account code needs to be created in your Xero to record dividends properly. But not just any code! It must be given the correct account type in the chart of accounts. The account type that you need to use for the new account is “Equity”. Here are the steps to create a Xero account code for Dividends:.
Can I Journal the opening bank balances?
As you can’t journal the opening bank balances as part of this, the balances of the banks could go to a Suspense account and that would be the account used on the Receive Money transaction in the loan account. Hope that helps!
Another thing we asked ourselves was: how do I enter the opening balance of a bank account?
If you’re introducing an opening balance of a bank account transferred to the entity after the Conversion Date, the best way to enter this would be a Receive Money.
As you noted the Conversions Balances wouldn’t be the best place to put the opening balance of the new accounts following the merge since the date would be incorrect. If you’re introducing an opening balance of a bank account transferred to the entity after the Conversion Date, the best way to enter this would be a Receive Money.