Example with Different Periods and Different Rates

In this example of the Realized Exchange Rate Gains and Losses Report, a customer invoice is recorded in one accounting period and paid in a subsequent accounting period when the exchange rates are different.

The U.K. subsidiary records a customer invoice dated February 15 for $400 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: $400 × 0.6379 = £255.16.

When the month end currency revaluation is run for February, the exchange rate is 0.61. The unrealized gain/loss for the open receivable is recorded using that exchange rate and reversed in the subsequent period.

On March 26, when the invoice is paid, the dollar to pound exchange rate is 0.67305. The conversion to pounds is $400 × 0.67305 = £269.22).

General Ledger Impact on February 15

General Ledger Impact on March 26

The payment has the following general ledger impact:

March Report

A portion of the Realized Exchange Rate Gains and Losses report for March 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