Applied Payments and Realized Gain/Loss
NetSuite calculates and posts exchange rate gain or loss (variance) when you apply a payment or credit to an invoice, vendor bill, or journal entry that functions as a bill or invoice. The invoice, vendor bill, or journal entry is the source transaction. The variance occurs when the exchange rate on the source transaction differs from the exchange rate on the payment. The payment can be a payment transaction, credit memo, customer deposit, or journal entry.
The variance resulting from changes to the exchange rate for payments applied to source transactions are posted using a currency revaluation transaction. The currency revaluation transaction and payment are linked as related records to the source transaction. For more information about this transaction type, see Currency Revaluation Transactions.
By default, the variance for closed transactions posts to the Realized Gain/Loss account. However, you can create rules to post these variances to different accounts. For information, see Foreign Currency Variance Mapping.
When foreign currency transactions remain open or unpaid at the end of an accounting period, you need to generate revaluations for them before closing the period. You also need to revalue balances in foreign currency denominated accounts. This revaluation process is separate from realized gains and losses that are automatically calculated for paid transactions. For information, see Revaluation of Open Currency Balances.
Foreign-currency-denominated source transactions remain open until the invoice balance equals zero in both the foreign currency and the base currency.
For details about variance calculations, posting periods for realized gain and loss, and the effecting of voiding payments, see the following subsections: