Accounting for transaction fees
LauS Member Posts: 1
I'm trying to figure out how to account for some currency exchange and transaction fees. Here's the situation:
- Wave account is in CAD (I'm a Canadian tax resident)
- Invoices are primarily issued in USD
- My business expenses are in both CAD and USD
Given the situation where:
- I issue an invoice for 5000 USD
- Customer pays the 5000 USD, but I end up with 4980 USD because of SWIFT fees being taken along the way. I record a payment received for 4980 USD on that date, and Wave records it as
4980 x (that day's exchange rate)CAD.
- The invoice is paid in USD to a multi-currency virtual bank (think TransferWise, CurrencyFair, etc).
- When my bills come due, I may transfer some of that money into CAD to pay my CAD bills and pay others in USD directly.
- How do I account for the SWIFT fees taken out? That is unrealised gain.
- How do I account for the actual exchange rate I paid, considering the conversion was at a different date than that of the invoice? That may be unrealised gain, or inversely some additional gain.
- How do I account for the FX commission, considering it's just taken from the converted amount, rather than issued to me separately?
Thanks for your help!