My auditor has recommended to change the home currency from Singapore dollars to United States Dollars. What should I do?
A change in home currency involves lots of work. Usually the financial software will not allow a change in home currency. A company has to create a new database and import all the master files like debtor profile, creditor profile, Chart of Accounts and Item code. User will have to enter all the opening balances.
User has to enter daily or monthly exchange rate. The sales will usually be a fixed rate for the entire company. When customer pays, the bank will determine the exchange rate. The difference between the invoice rate and the bank exchange rate will be the exchange rate differences. This is the matching principal concept. Most software like SAP B1 and Sage 300 handles the exchange rate differences automatically.