Write off Bad Debts (original invoices in foreign currencies)
I need to write off some historical invoices recorded in one of my client's MYOB AccountRight online file, which were originally issued in foreign currency (USD) & converted to Aust dollars (AUD) at historical foreign exchange rates at dates of invoices being issued. So how should I record the "Bad Debts" via Settle Return & Credits as a negative sale via the Sales Register menu? Do I need to create the matching invoices in negative equivalent amounts in USD or AUD? As there will be foreign currency exchange rates differences - date of bad debts recorded (different from original invoice), do I also need to create a new Expense Account - Realised foreign exchange losses?
Writing off bad debts are usually done by reversing of the original sale, and allocating the transaction to a bad debts expense account. As there is the addition of being a foreign currency transaction, you will need to deal with the difference due to the exchange rate, which you would usually put against a gains/loss account.
We recommend checking with a financial advisor on how best to record this transaction in your specific situation, but when you are ready to record it, these Help Articles have detailed information and instructions:
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