Foreign Exchange Gain Loss

In a multi-currency environment, financial transactions such as payments and adjustments created for an account can result in loss or gain due to fluctuations in the exchange rate at different point in time. This loss or gain is booked under the Foreign Exchange Gain Loss in the General Ledger and does not impact the account balance of the person.

The Foreign Exchange Gain or Loss might occur when:

  • Exchange Rate for Invoice Currency to Division’ Base Currency is different on Bill Completion Date and Payment Freeze Date

    Assumption: In this case, the Invoice Currency and Payment Currency are same.

  • Exchange Rate for Adjustment Currency to Division's Base Currency is different on Bill Completion Date and Adjustment Freeze Date

    Assumption: In this case, the Adjustment Currency and Invoice Currency are same, but they are different from the Division's Base Currency.

  • Exchange Rate for Adjustment Currency to Division's Base Currency is different on Bill Completion Date and Payment Freeze Date

    Assumption: In this case, the Adjustment Currency, Payment Currency, and Invoice Currency are same, but they are different from the Division's Base Currency.

Oracle Revenue Management and Billing facilitates you to calculate the foreign exchange gain or loss and book it against an FXLG distribution code. However, you can calculate the foreign exchange gain or loss when you have enabled the FT GL Extension feature. For more information on how the system calculates the foreign exchange gain loss, see Foreign Exchange Gain Loss Calculation. For more information on how to setup the Foreign Exchange Gain Loss feature, see Prerequisites.

Note: The system can calculate the foreign exchange gain or loss appropriately when the Division's Base Currency is same on Bill Completion Date and Adjustment/Payment Freeze Date. Otherwise, erroneous results might occur.

Parent Topic: Oracle Revenue Management and Billing Financial Services Business Processes