Accounting for foreign currency transactions and valuing foreign currency balance sheet accounts can be a huge job if you don’ t have a good system for it. Financial reporting standards require you to properly assign exchange rates to transactions as they occur. Financial reporting standards also require you to periodically account for foreign currency exchange rate fluctuations in your balance sheet accounts that are denominated in foreign currencies.
Ideally you will want an ERP system that automatically assigns exchange rates to transactions and records both the originating currency and the functional currency, and posts the functional currency amounts to your general ledger. You will want the system to automatically calculate the realized exchange rate loss or gain on transactions leaving your balance sheet.
On a periodic basis you will also want the system to automatically revalue balance sheet accounts for fluctuations in the foreign exchange rates for the various currencies with which you transact business. The changes in balance sheet accounts should automatically create unrealized gains and losses in appropriate accounts.
The easier you can have these processes work the less errors you’ll have in reporting and the less effort you’ll have to expend to get it right.
Dynamics GP offers a robust multicurrency module to automatically account for these types of transactions and valuations, making reporting and accounting easy.
This video shows the minimal Multicurrency setup necessary to effectively use Dynamics GP: http://youtu.be/ZyT8WbtdvU8