Unrealized and realized gain and loss accounts

Realized gain and loss accounts are used to post the difference that results from a change between daily rates. The rate that is in effect at the time a transaction is created is compared with the rate that is in effect at the time the transaction is closed. For example, you create an invoice with a daily rate and the rate changes before you pay the invoice. The differences are posted to a realized gain or loss account.

Unrealized gains and losses occur if a transaction that was entered during the period is still outstanding at the end of the period. Unrealized gain and loss accounts are used to temporarily account for any changes in the currency exchange rate. The transaction date is compared to the period ending date.