Write Off Adjustment Scenarios

The following scenarios indicate how foreign exchange gain or loss is calculated for write off adjustments which are created against a bill:

• Scenario 1 - Adjustment Freeze Date Not Equal to Bill Completion Date; Exchange Rate is Different; Full Bill Amount is Written Off

  	Bill Completion Date (04-30-2015)	Adjustment Freeze Date (05-10-2015)
  Exchange Rate From	USD	USD
  Exchange Rate To	INR	INR
  Exchange Rate	50	60
  Invoice/Adjustment Currency	INR	INR
  Invoice Amount	1000	-
  Base Currency	USD	USD
  Booked Revenue in Base Currency	1000/50 = 20	-
  Adjustment Amount	-	1000
  Adjustment Amount in Base Currency on Bill Completion Date	-	1000/50 = 20
  Realized Revenue (Adjustment Amount) in Base Currency on Adjustment Freeze Date	-	1000/60 = 16.67
  Foreign Exchange Gain or Loss	-	20-16.67 = 3.33

  Observation: In the Scenario 1, there is foreign exchange loss of 3.33 USD on 05-10-2015 because of difference in exchange rate.

• Scenario 2 - Adjustment Freeze Date Not Equal to Bill Completion Date; Exchange Rate is Different; Partial Bill Amount is Written Off

  	Bill Completion Date (01-30-2014)	Adjustment Freeze Date (03-03-2015)
  Exchange Rate From	USD	USD
  Exchange Rate To	INR	INR
  Exchange Rate	60	55
  Invoice/Adjustment Currency	INR	INR
  Invoice Amount	1000	-
  Base Currency	USD	USD
  Booked Revenue in Base Currency	1000/60 = 16.67	-
  Adjustment Amount	-	600
  Adjustment Amount in Base Currency on Bill Completion Date	-	600/60 = 10
  Realized Revenue (Adjustment Amount) in Base Currency on Adjustment Freeze Date	-	600/55 = 10.91
  Foreign Exchange Gain or Loss	-	10-10.91 = -0.91

  Observation: In the Scenario 2, there is foreign exchange gain of 0.91 USD on 03-03-2015 because of difference in exchange rate.