How do I apply custom FX rates

Enter a custom FX rate for your transactions and Fair Value

ℹ️ When conducting investment transactions in a currency different from your reporting currency, it is essential to accurately monitor and report the disbursed amount.

ℹ️ For automatic currency conversion, Rundit uses Fixer io. Exchange rate data delivered by the Fixer API is collected from over 15 reliable data sources. Sources include banks and financial data providers.

In the Rundit tool, you have two types of fx rates. One is transactional and the other one is Fair Value FX Rate.

1. Transactional FX Rate

• For example, if you invest 100,000 dollars on 20th of March 2023, you can set the exchange rate for that transaction to be 1.2 euros, meaning 1 dollar = 1.2 euros. You are able to set a specific exchange rate for any type of transaction such as investments, loan repayments, dividends etc.

• The FX Rate you set for that transaction, will however, not affect fair value calculations. Instead, if you want to apply that rate to all fair value calculations as well, you need to add a fair value fx update.
• When you create a transaction and you input transactional fx rate for that specific transaction, at the end of the flow, you will be asked to apply that fx for all fair value calculations as well. What this means is that it will add a fair value fx update for that date and you will be able to see it in the fx table. (Settings / fx and conversion settings).

2. Fair Value FX Update

When you want to adjust the exchange rate for fair value calculation:

• Navigate to Settings > FX and Conversion Settings and press Add FX Update.
• There you can add a fair value FX Update for any combination of currencies and for any date.
• If you add a manual valuation update to a portfolio company, Rundit will be using the automatic FX rate based on your settings (fixed/ floating). If you prefer to keep the previously set custom FX rate, you can add a manual FX update for the Fair value for that date.
• The manual FX rate updated for a certain date will be applied to the fair value of companies with the same quote currency transactions on that same date. However, it does not influence the FX rate set for the investment transaction; that rate only changes if you manually adjust it by editing the investment transaction.
• Please note that when you set an exchange rate from dollars to euros, it will not automatically generate a reverse rate.

Automatic FX Updates

• Rundit performs automatic fx updates on a monthly basis, impacting fair value calculations.
• Additionally, each time you add a transaction, Rundit updates all fx rates. You can view these automatic updates in the fx table under Settings > FX and Conversion settings.
• It's important to note that Rundit updates fx rates with every transaction, even if you use transactional fx.
• You have the option to apply the transactional fx to fair value calculations as well, with a prompt given at the end of the transaction flow. If you choose not to apply the transactional fx, fair value will utilize the automatic fx rate for that date instead of the transactional fx rate.

Example:

• You add an equity transaction for 1.01.2023 for 100,000 dollars with transactional fx rate of 1.2 to euros.
• At the same time, Rundit get our automatic fx rate update for the same currency combination and it is 1USD = 1.25 euros.
• At the end of adding equity investment flow, you will be asked to apply transactional fx rate (1.2) to fair value calculation as well.
• If you decide to do so, both the invested amount and fair value will use 1.2 exchange rate.
• If you decide not to, the invested amount will use 1.2, but fair value 1.25 which might lead to returns being affected by fx rate difference.