F/X losses on reimbursed expenses.

[deane@gooroos.com]

I'm trying to figure out how to handle the following scenario:

	Our company incurred an expense of USD 10.00 for which we expected
	to be reimbursed by the client.  At the time, the exchange rate to
	CAD was 1.6 so we ended up paying CAD 16.00

	A month later, the client writes us a cheque for USD 10.00 to
	reimburse us for the expense.  When we go to cash the cheque, the
	exchange rate has dropped to 1.5 so we only get CAD 15.00.

It seems like the easiest thing is to debit the normal expense accounts for
the initial CAD 16.00, then credit them for CAD 15.00 when the
reimbursement cheque arrives, leaving a net expense of CAD 1.00

Or should I debit *and* credit CAD 16.00 to the normal expense accounts,
then debit CAD 1.00 to "Foreign Exchange expenses"?

Or is there some other approach that I'm missing?

Also, given that we are *expecting* to be reimbursed, should an entry go
into Accounts Receivable for it?  If so, where would the balancing entry go?

Thanx.

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  - deane                          Gooroos Software: Plugging you into Maya

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