Exchange Rates

This is an explainer of how Exchange Rates work in Translucent. You can find Exchange Rates within Settings

By default Translucent uses Open Exchange Rates to determine the applied exchange rate. In line with accounting standards, we distinguish between a profit and loss FX rate and a balance sheet FX rate. 

P&L Exchange Rates

For P&L calculations, Translucent employs a monthly average rate for all transactions and does not transfer the differences to an FX reserve. 

Balance Sheet Exchange Rate 

To account for any discrepancies at month-end if the balance sheet rate deviates from the average rate. The balance sheet rate is determined based on a fixed date at the end of the month, inevitably creating a distinction between the two rates. 

FX differences between Xero and Translucent 

The FX approach in Translucent contrasts with Xero’s calculation. Xero translates each transaction at a precise minute rate and subsequently re-translating it at a daily rate, with the resulting differences being allocated to a temporary FX reserve. 

If you want exact parity across reports you can utilize the Xero Accurate FX features. This pulls Xero reports directly from the balance sheet or P&L, ensuring consistency in the numbers by maintaining the API balance.

Please note: this only works at month-end dates, as the zero API exclusively supports month-end data retrieval. 

You will also be unable to view weekly comparison periods.

Custom Exchange Rates 

The platform offers flexibility in choosing any FX rate. By navigating to the settings, you can input custom FX rates of your preference.