Unrealized Currency Gains and Losses

If you company buy or sell something using a different currency than your primary currency, you will have to deal with foreign currency gains or losses.

These foreign currency gains or losses can either be realized or unrealized.
Realized gains or losses refer to profits or losses from completed transactions. For example, you issued invoice to a customer on one day (at one exchange rate), and the customer paid it on another day (when a different exchange rate is actual), you will faces with realized currency gains or losses.
The gains or losses from these transactions are calculated in PayTraq automatically and will appear in corresponding payment journal entries (on general ledger account - Exchange rate realized gains/losses). 
Unrealized gains or losses refer to profits or losses that can be calculated, but the relevant transactions have not been completed.
For example, you issued invoice to a customer, and this invoice is still waiting for payment. In this case, if the exchange rate on the day the invoice was written is different from the exchange rate for today - you have unrealized currency gain or loss from this invoice. Of course this gain or loss is just "on paper".
To calculate unrealized currency gains and losses for all assets and liabilities nominated in foreign currency (issued and received unpaid invoices, open loans, etc.) go to Accounting -> New Operation -> Calculate Unrealized Foreign Exchange Gains and Losses, choose the calculation date and click ''Post'' button.

Still need help? Contact Us Contact Us