The number of companies, that have to submit financial information in accordance with the principles of IAS/IFRS to their owners or financing institutions, is growing. Computer programs are supposed to help them in this, but this is not always the case.

At Odoo, we encountered a problem in several areas.

One of them is the valuation of the purchase goods, and similar so-called non-financial assets (non-monetary items), for foreign currencies. There is usually a time difference between the receipt of inventory and receiving the purchase invoice, which causes a change in the exchange rate of the purchase currency, and therefore a difference in the valuation of these two transactions. The rules contained in IAS 21 and confirmed in IFRIC 22 clearly indicate that these differences are not exchange differences - the amount exist, and must be settled, but e.g. adding to the value of purchased inventory. Meanwhile, Odoo's settlement mechanisms treat them as exchange differences, which distorts the financial result, and even worse, also tax statements.

There is also a similar problem with the settlement of advance payments received in a foreign currency, because in Odoo deferred income is transferred to current income based on the amount in a foreign currency, instead of being immediately fixed in the books main currency. When the time elapses between the advance payment and its settlement after the goods delivery, and exchange rates change, unnecessary differences also arise and are incorrectly treated as exchange differences - according to IAS/IFRS, such advance payment related balances are non-monetary items as well.

It is hard to resist the impression, that accounting in Odoo has so far been treated with little care, and solutions have been introduced by IT designers rather than experienced accountants with practice in a slightly larger business. Fortunately, this is changing, also thanks to our own work and suggestions for changes regularly sent to Odoo. Since the introduction of version 16, some shortcomings have already disappeared - the program, for example, settles exchange differences also on partial settlement payments. We keep our fingers crossed for further work and improvements!