* Introduction:
The small and medium enterprises (SMEs) must consider the importance of update the accounting records of balances in foreign currency inside of accounting. This not only responds to the current financial and tax regulationsbut it is also crucial for one correct assessment of your financial situation. In Mexicorecent days have shown a significant devaluation of the peso against the dollar, exceeding 10%. This phenomenon has important implications both in financial management and in compliance with Fiscal obligations.
* Financial Regulations:
The Financial Reporting Standard (NIF) B-15 establishes the guidelines for the recording and disclosure of the effects of variations in the foreign currency exchange rates. According to this standard, the foreign currency transactions They must be recognized at the exchange rate in force on the date of the transaction and subsequently, the balances in foreign currency must be adjusted to the exchange rate at the closing date of the financial year or accounting period.
* Tax Implications:
The Income Tax Law (ISR) In Mexico, it indicates that exchange losses derived from obligations in foreign currency are deductible for tax purposes. On the other hand, exchange gains are considered cumulative income and, therefore, must be included in the taxpayer’s tax base.
– Example 1: Payment of an Invoice in Foreign Currency
An SME makes a credit purchase for $1,000 dollars, initially recorded at an exchange rate (TC) of $16 MXN/USD. Two weeks later, at the time of payment, the exchange rate has risen to $17.50 MXN/USD.
1.1 Initial registration: $1,000 USD $16 MXN/USD = $16,000 MXN
1.2.- Registration at the time of payment: $1,000 USD * $17.50 MXN/USD = $17,500 MXN
The company must recognize an exchange loss of:
$17,500 MXN – $16,000 MXN = $1,500 MXN
– Example 2: Comparison of Accounts Payable Balances
At the end of the month, an SME has an account payable in dollars with a balance of $2,500 USD. Initially, these dollars were recorded at an exchange rate of $16.60 MXN/USD, equivalent to $41,500 MXN.
At the end of the month, the exchange rate has increased to $18.20 MXN/USD.
2.1 – Initial balance: $2,500 USD * $16.60 MXN/USD = $41,500 MXN
2.2 – Balance at the end of the month: $2,500 USD * $18.20 MXN/USD = $45,500 MXN
The company must recognize an exchange loss of:
$45,500 MXN – $41,500 MXN = $4,000 MXN
* Conclusion:
It is essential that SMEs in Mexico keep their accounting records updated with respect to exchange variations, not only for regulatory compliance, but also to accurately reflect their financial and fiscal situation. The devaluation of the peso against the dollar can generate significant exchange losses, which, although tax deductible, affect the liquidity and profitability of the company. Therefore, adequate management and registration of foreign currency operations is vital for the sustainability and growth of SMEs.
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