Unrealized and realized gain and loss accounts

Realized gain and loss accounts are used to post the difference resulting from a change between exchange rates. The exchange rate in effect at the time a transaction is entered is compared with the exchange rate in effect at the time the transaction is closed. For example, an invoice is defined with an exchange rate and the rate changes by the time the invoice is paid. The difference is posted to a realized gain or loss account. Realized gain and loss accounts are only available in Payables or Receivables.

If your finance enterprise group uses multiple currencies, you must set up at least one set of currency gain and loss accounts. If you use revaluation or translation, then you must set up gain and loss accounts for each process. These are the system accounts that can be set up for currency gain and loss:

• Realized gain for Payables or Receivables
• Realized loss for Payables or Receivables
• Unrealized gain for Global Ledger
• Unrealized loss for Global Ledger
• Translation gain for Global Ledger
• Translation loss for Global Ledger

You can use the same account for realized gain and loss, unrealized gain and loss, and translation gain and loss.

Unrealized gains and losses and translation gains and losses occur when balances are revalued at a different rate than the rate that was in effect at the time the transactions were created. Unrealized gain and loss accounts are used to temporarily account for any changes in the currency exchange rate from the transaction date to the period ending date.

Global Ledger does not generate any entries to the realized gain or loss accounts. Payables and Receivables are the only solutions that use these accounts. The values that are sent from Payables and Receivables are posted in Global Ledger.