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

Rate = 0.6379	Transaction Currency		Base Currency
Account	Debit	Credit	Debit	Credit
Accounts Receivable	$300		£191.37
Revenue		$300		£191.37

General Ledger Impact on February 25

Rate = 0.653733	Transaction Currency		Base Currency
Account	Debit	Credit	Debit	Credit
Bank Account	$300		£196.12
Accounts Receivable		$300		£196.12
Accounts Receivable	$0		£4.75
Realized Gain/Loss		$0		£4.75

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.

Name	Subsidiary	Source Accounting Period	Source Exchange Rate	Pmt Accounting Period	Pmt Exchange Rate	Applied Amount	Applied Amount (Base)	Realized Gain/Loss
UK Cust USD	U.K.	Feb	0.64	Feb	0.65	300.00	£196.12	£4.75

Note:

The exchange rates shown in the Realized Exchange Rate Gains and Losses report are rounded to 2 decimal places. To view the complete exchange rate used to calculate the base currency amounts, you must drill down to the source transaction.

Related Topics

Examples for the Realized Exchange Rate Gains and Losses Report

Example with Different Periods and Different Rates

Example of Credit Memo in a Different Period with a Different Rate

General Notices