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Accounting Transition 12/16: Exchange Rate Differences on Advance Payments

Exchange Rate Differences on Advance Payments Arise upon Deduction

Written by Petr Pech

Exchange Rate Differences on Advance Payments

As we mentioned earlier, advance payments are not receivables and are not subject to year-end revaluation as of the balance sheet date. In the accounting records, they remain at the original exchange rate at which they were posted.


Exchange Rate Difference When Settling an Advance Payment

The actual exchange rate difference on an advance payment is recognized only at the time of final settlement (when the invoice is issued or received).

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