Multi-currency books in Africa: how to handle FX revaluation properly

A worked example in naira
You buy goods from a US supplier for $10,000 on 1 September when the rate is ₦1,329. You record stock and a payable of ₦13,290,000. At 31 October the rate is ₦1,370 and you have not paid. The payable is now worth ₦13,700,000, so you post an unrealised FX loss of ₦410,000. The stock stays at ₦13,290,000 — it is non-monetary. When you pay, the difference between the rate on payment and the last revalued rate is a realised gain or loss.

Which rate should you use?
A single, documented source: the CBN NFEM rate in Nigeria, Bank of Ghana reference rate in Ghana, CBK in Kenya, SARB or your bank’s closing rate in South Africa. Auditors care about consistency more than which source.

Which software automates revaluation?
Business Central (exchange-rate adjustment batch), Dynamics 365 Finance, NetSuite, SAP Business One, Odoo, Xero (Premium/Established) and QuickBooks (Essentials and up) all revalue open balances. Zoho Books handles multi-currency from Professional. Check that the tool revalues bank accounts as well as receivables and payables — some only do the latter.

Common mistakes

• Revaluing stock or fixed assets (do not).
• Booking supplier invoices at the payment-date rate instead of the invoice-date rate.
• Leaving domiciliary account balances at historical rates for the whole year.
• Mixing parallel-market and official rates without disclosure.