Example with Same Period but Different Rates

In this example of the Realized Exchange Rate Gains and Losses Report, a customer invoice and payment are recorded in a single accounting period, but the exchange rates on the transaction dates are different.

Scenario

The U.K. subsidiary records a customer invoice dated February 15 for $300 U.S. dollars (USD). The U.S. dollar to pound sterling exchange rate on February 15 is 0.6379, and dollars are converted to pounds as follows: $300 × 0.6379 = £191.37.

On February 25, the invoice is paid. The dollar to pound exchange rate is 0.653733, and the conversion to pounds is $300 × 0.653733 = £196.12).

General Ledger Impact on February 15

General Ledger Impact on February 25

February Report

A portion of the Realized Exchange Rate Gains and Losses report for February is shown in the following table. Transaction numbers and type, source account, transaction currency, and transaction dates are omitted here. The transactions and associated realized gain/loss are in the Accounts Receivable section of the report, and the source account is Accounts Receivable. Although the transaction currency is U.S. dollars, the currency symbol for the British pound (£), the base currency, appears in the report because the U.K. subsidiary has been selected in the Subsidiary Context footer.

General Notices