Example: Unrealized Gain/Loss on a Foreign Currency Voucher

In this example, a Canadian company calculates an unrealized gain/loss amount on an open foreign currency voucher in the euro (EUR).

Because of the exchange rate risk, the potential exists for an unrealized gain or loss at the end of the fiscal period when the open voucher (EUR) is revalued against the Canadian dollar (CAD).

Description	Currency	Amount	Exchange Rate January 1	Exchange Rate January 31
Voucher (domestic)	CAD	1,394.25	1 EUR = 1.39425 CAD
Voucher (foreign)	EUR	1,000.00
Open voucher (domestic)	CAD	1,392.21		1 EUR = 1.39221 CAD
Unrealized gain/loss	CAD	+ 2.04

The foreign currency voucher on January 1 is 1,000.00 EUR, or 1,394.25 CAD in the domestic currency.

1,000.00 EUR Ã 1.39425 = 1,394.25 CAD

The foreign currency voucher remains open on January 31 and is revalued against the CAD.

1,000.00 EUR Ã 1.139221 = 1,392.21 CAD