Exchange Gain and Losses on Receipt Not billed transactions

[Lasa1]

I have a question on the revaluation for currency exchange rates on intermediate account Received-Not -Billed (RNB) which is reported in Liabilities in the Balance Sheet.

When we receive stock or a service (1) we debit inventory (if stock) or expense account (if service) and (2) credit RNB.
When the invoice is received, we debit RNB and credit vendor account.

We have a significant number of cases where we need to reverse the receipts done (1) in previous accounting periods because material was not delivered, or service rendered. Question is how to treat exchange rate differences when transaction is done in a foreign currency.

Example, Swiss Company CHF with transactions in EUR.
Period 1. Stock is received in the system (by mistake)
DT Inventory 100 EUR 150 CHF
CT Received Not Billed 100 EUR 150 CHF
Period 2. Reversal of previous booking
DT Received not billed 100 EUR 155 CHF
CT Inventory 100 EUR 155 CHF
Balance left in RNB and inventory account is due to forex. Since inventory is a non-monetary asset, I would credit RNB and debit Inventory account for 0 EUR and 5 CHF.
However, if purchase would be a service, then I would credit RNB account and debit exchange gain and losses in the P&L for 0 EUR and 5 CHF.
Does it make sense?

[DJP]

Hello,

Question: why are you recognising inventory or services if these have not been delivered/provided?

[pub_acco]

If you're correcting an error, you have to reverse all the original entries including forex gains/losses that your accounting software might have created automatically, as if nothing had happened at all. So, if you recorded expense and RNB for a phantom service, you'll reverse the expense and RNB. If your software automatically created forex entries for you, you'll also reverse such entries.

If the error is material, you'll restate the prior year financial statements.

[DJP]

agree

[JRSB]

Isn't the question just about receiving an invoice in advance of receiving the good/service?

[Marek Muc]

but then it wouldn't be recognised as inventory/expense, but as a prepayment