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Intercompany Loan Accounts & FX Revaluation

The Workaround

Because Xero only performs automatic foreign currency revaluation on bank accounts, you're having to classify intercompany loan accounts as bank accounts, purely to get the FX conversion functionality, even though they are not 'bank accounts'

Why This Is Problematic

• Without changing the layout, it misrepresents the account type in the chart of accounts and on the balance sheet by default, which if left, undermines the integrity of financial reporting, particularly when producing statutory accounts or group consolidations
• It's a compliance headache as auditors and accountants expect loan accounts to look like loan accounts
• It's a friction point for anyone inheriting or reviewing the Xero setup who doesn't know why the account was set up that way

The Proper Fix

Xero should extend its foreign currency revaluation functionality to non-bank balance sheet accounts, specifically allowing loan, intercompany, and other nominated accounts to participate in automatic FX revaluation at period end, without needing to be disguised as bank accounts.