If your business deals with multi-currency, you usually have to revalue the foreign currency against the home currency to reflect changes in the exchange rates. For example, if you have AUD Account Receivable balance of $1,006,- on Dec 1 with a rate of 1.0000 CAD, and at the end of Dec the rate changes to 1.0535 CAD, then the change of CAD value because of the AUD rate fluctuation (Unrealized Gain/Loss) will be $53.80,-.
Thus, the foreign currency revaluation is the difference between of exchange rate recorded at the time of transactions and at the time of adjustment, times the carrying balance. In QuickBooks, this foreign exchange revaluation is called Home Currency Adjustment which is calculated on all foreign currency account balances – bank account, credit card, A/R, & A/P.
In Home Currency Adjustment, the Exchange Gain/Loss expense account will be automatically created to balance the (home currency equivalent) of the foreign exchange accounts.

Let’s do Home Currency Adjustment from the example above:

1. Review the Unrealized Gain/Loss report from Report > Company & Financial > Unrealized Gains & Losses. Enter the exchange rates once are prompted with Enter Exchange Rates window. Make sure these rates are the rates you will be using in Home Currency Adjustment window in Step 2.

QB Home Ccy Adjustment 1


Click Continue to produce the report:

 

QB Home Ccy Adjustment 2

 

2. Go to Company > Manage Currency > Home Currency Adjustment.
Select the currency from the drop down list and enter the exchange rate (equal to exchange rate in Step 1). Below is the screenshot when AUD is selected:

 

QB Home Ccy Adjustment 3


 

The balance is equal to the balance of Unrealized Gains/Losses report for AUD (except for rounding error). Click Save & New to do adjustment for other currencies.

 

QuickBooks debit the Exchange Gain/Loss expense account & credit A/R AUD for 2 customers under the Name column:

 

QB Home Ccy Adjustment 4


Note that you can only make Home Currency Adjustment one currency at a time.