Your company paid a deposit for ceramic planters, then paid the balance after production. Both payments used different conversion quotes. The goods have arrived, and purchasing divides the total funding cost by the invoice amount to produce a blended rate for the stock entry. Your accountant asks when each advance was recognised, when the goods qualified for recognition and whether any payable remained at a reporting date. The funding average cannot answer those questions.
The planters and bookkeeping conversation are fictional illustrations, not transactions or a worked accounting example. This article is general information, not accounting, tax, customs, legal or investment advice. It gives no journal entries, local tax treatment or universal cost formula. A qualified accountant must determine the applicable framework, classification, dates and measurement for the actual arrangement.
Separate invoice currency from funding and functional currency
Give the accountant the accepted invoice currency and each amount the supplier credited. Identify the currencies or assets used to fund the payment and any conversion performed by a bank or provider. Separately ask the accountant to confirm the company's functional currency under its reporting framework.
The IFRS Foundation's IAS 21 overview explains that functional currency reflects the primary economic environment and that exchange-rate selection and exchange differences are central questions. IFRS requirements are relevant only where applicable; the currency on a supplier invoice does not decide the company's functional currency.
The CNY-or-USD invoice guide addresses the commercial payment choice. Retain that choice and any amendment, but do not treat the payment provider's quote as an accounting-policy decision.
Build a dated record for each instalment
Preserve invoice versions, payment instructions, funding evidence, conversion confirmations and seller acknowledgements. Record actual dates separately: funding sent, conversion made, payment executed and supplier credit confirmed. The accountant decides which events support recognition and measurement; do not collapse them into the warehouse arrival date.
Use the partial-payment guide to reconcile the instalments against the invoice. A token transfer and a supplier invoice credit are different records. Include failed, returned or unapplied amounts rather than presenting every funding transfer as a successful deposit.
The following is an editorial handover schedule, not an accounting calculation:
| Record | Information to give the accountant |
|---|---|
| Purchase | Parties, invoice currency, agreed goods and payment terms |
| Each advance | Amount, contractual purpose, dated evidence and supplier credit |
| Conversion | Funding amount, currencies or assets, quote and execution records |
| Goods | Contract, dispatch and receiving evidence relevant to recognition |
| Unpaid balance | Currency, amount and outstanding status at relevant dates |
| Charges | Separate provider, acquisition, freight and other supporting invoices |
| Adjustments | Refunds, credits, corrected amounts and unresolved differences |
Keep original evidence beside the schedule. If a date is missing, mark it unresolved and request confirmation; do not fill it with the date of a convenient email.
Ask whether the advance falls within IFRIC 22
The IFRIC 22 overview concerns foreign-currency advance consideration. Its application depends on the recognised item and actual terms. A refundable security deposit, an ordinary prepayment for goods and an unapplied provider balance need not have the same classification.
For an advance within its scope, IFRIC 22, paragraphs 8 and 9, links the relevant transaction date to initial recognition of the non-monetary advance item and requires a date for each advance payment or receipt. Have the accountant check the current applicable text and how the rule affects the portion of the goods covered by each advance. This is not a direction to translate the entire purchase at one deposit rate.
A payment called “balance” may also precede recognition of the goods. Conversely, goods may qualify for recognition before the final payment. Let the accountant assess the contract and evidence rather than classify every deposit as one treatment and every balance as another solely from their labels.
Keep the remaining payable and exchange differences visible
Ask the accountant to distinguish the advance-covered portion of the goods from any monetary payable remaining when the goods are recognised. Supply the open balance at relevant reporting dates and the later settlement evidence. These facts allow the accountant to assess subsequent measurement and exchange differences under the applicable framework.
Do not ask purchasing to eliminate a difference by replacing historic rates with today's rate or averaging the two provider quotes. Keep the accountant's chosen rates, sources and rationale with the accounting workpapers. This article does not prescribe a posting or decide whether a difference belongs in inventory, profit or another category.
Separate service and acquisition charges from the supplier's credited goods amount. The accountant assesses which charges belong in cost and which receive another treatment. A lower net supplier receipt, a conversion spread and a separately invoiced service fee should not silently become the same line.
Hand over the complete purchase history
The accounting-records guide covers the broader evidence folder. For this paid batch, add the instalment timeline, goods-recognition evidence, outstanding-balance history and separate charges. Keep commercial reconciliation distinct from the accountant's functional-currency measurement.
Use pay an invoice for an A2vanta enquiry about a future supplier payment. A2vanta does not choose your reporting framework, value inventory or calculate tax. For an earlier payment, request missing payment records through the established support channel and let your accountant determine their treatment.