How to record FX loss on foreign donation
Records the currency loss between the pledge date and the payment date for a foreign charitable contribution.
| Account Name | Type | Debit ($) | Credit ($) |
|---|---|---|---|
| Charitable Donation Expense | Expense | 5,000.00 | - |
| Realized FX Loss | Expense | 150.00 | - |
| Cash (Foreign Currency) | Asset | - | 5,150.00 |
💡 Accountant's Note
This entry accounts for the additional local currency cost incurred to settle a fixed-amount foreign currency donation pledge due to exchange rate fluctuations.
Practitioner & Systems Framework
💻 ERP Architecture
Ensure the donation module or AP subledger triggers a gain/loss calculation upon payment.
⚠️ Audit Flags
Discrepancy between board-approved pledge amounts and final cash outflow.
📄 Required Documentation
Pledge agreement, bank confirmation of transfer, and spot rate at time of payment.
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