Let's assume you have two accounts - one in DKK and another in EUR, and your default currency is DKK. The cash in your second account (EUR) is there therefore a foreign currency cash holding.
Foreign currency cash holdings are impacted by exchange rate changes when converted. In the context of this example, this means that the value of the EUR account converted to DKK can increase or decrease based on exchange rate fluctuations. The cash balance currency movements include:
- Changes in the rate of exchange between your chosen currency (DKK in this example) and the cash holding currency (EUR in this example)
- Adjustments associated with currency movements
For example, if the EUR/DKK exchange rate changes, it affects the value of EUR 50,000 when converted to DKK. If the rate shifts from EUR 1 = DKK 7 to EUR 1 = DKK 6, the value in DKK will change accordingly. Please note, the difference in value between currencies is calculated between the selected time period.
After the currency change, the EUR account quoted in DKK is =
The cash balance currency movement on the cash holding is DKK 350 000 - DKK 300 000 = DKK 50 000.
The screenshot below shows the cash balance currency movements on an Account:
And using the figures above, the cash balance currency movements can be calculated as:
| Total P/L | 6,660.96 |
| P/L | 6,620.21 |
| Change in accruals | -16.50 |
| Other bookings | 11.10 |
| Cash balance currency movements | 46.15 |
The total Cash Balance Currency Movements are calculated as:
See how the cash balance currency movements affect the Account Value.