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According to the Tax Procedure Law, it is mandatory to carry out exchange rate valuation at the end of each provisional tax period. In foreign currency transactions, if there are exchange rate changes between the transaction date and the date of payment or collection, an exchange rate difference will arise. This exchange rate difference must be reflected in the income or expense accounts. If the transactions made during the valuation process are closed within the same period, the entire exchange rate difference is accrued within that period. However, if the transaction and the closing period are different, the exchange rate difference in each period should be accrued in the relevant period.

To explain the issue with an example;

Let's assume that we made a sale of 10,000 USD on April 12, 2016. On this date, 1 USD = 2.80 TL. The maturity of the invoice in question is 15 days and when 10,000 USD payment is received at the end of the maturity, there will be an exchange rate difference since the exchange rate is 1 USD = 3 TL. 2,000 TL is exchange rate difference income and this is reflected in the foreign exchange profits accounting account. The accounting transactions of the transactions made will be as follows.

According to the Tax Procedure Law, banks and insurance companies must be subject to rediscount. In businesses other than this, there is no obligation. The process of converting the written value on the promissory note receivables and promissory note debts that are not yet due at the end of the period into real value is called rediscount. The rediscount rate can be determined on the bill. If this rate is not specified, the Central Bank rediscount rate valid on the valuation day will be valid.

How is the rediscount amount calculated?

Rediscount Amount = [Nominal Value * Interest Rate * Number of Days] / [36,000 + (Interest Rate * Number of Days)]

He will explain the subject with an example.

As of December 31, 2016, there is a note receivable in our portfolio with a nominal value of 50,000 TL, dated March 11, 2017, with a 20% interest approval. The transactions to be carried out at the end of the 2016 period are as follows.

Discount Amount = [50,000 * 20 * 70] / [36,000 + (20*70)]

= 1,871.65 TL

Tip
In W3 rediscount transactions; In receivable bills or checks, credit is written to the accounting code entered in the rediscount accounting code field. In debit bills or checks, the relevant account will be debited.

Attention
If the rediscount amount calculated at the end of the period is an expense, it should be reflected to the relevant account as income at the beginning of the period, and if it is income, it should be reflected to the relevant account as an expense at the beginning of the period. Rediscount transactions should be made for all receivables and all payable bills.

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