Reconcile a currency conversion using units
Compare amounts only after identifying the source currency, destination currency and direction of the rate.
The distinction that matters
An exchange rate has units. Multiplying by destination-currency units per source-currency unit is different from dividing by the inverse rate. Keep the original transfer, conversion and fees as separate entries. An unexplained shortfall cannot automatically be called a fee when a conversion occurred.
A worked example
Suppose a fictional rate is 1.35 CAD per USD. US$100 corresponds to C$135 before any charges under that assumed rate. If a statement instead quotes 0.74074 USD per CAD, multiplying US$100 by that figure uses the units backwards. The actual provider's applied rate may differ from a reference rate.
Your next steps
- Write both currency codes.
- Record the rate direction and timestamp.
- Separate conversion from explicit fees.
- Ask for the transaction's actual applied rate when reconciling a statement.
Where this answer stops
The rate here is invented for arithmetic illustration. It is not a live quote or a promise of net proceeds. Northline cannot infer a provider's exchange spread from two incomplete amounts.
Sources & reading
Original Northline explanation. Worked examples use stated assumptions; they do not establish an operator’s policy or predict personal results. Read how we handle evidence.
An editorial review date is not a new policy effective date. Always check the current source for operator-specific conditions.
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