Unrealized currency differences

Unrealized currency differences are currency differences that are calculated for invoices that are not yet paid. Currency differences become realized (actual) at the moment:

The invoice is paid.
The unallocated payments/receipts or advance payments/receipts are assigned to an invoice.
The payment differences are written off.

Note: Whether unrealized currency differences are calculated, depends on several parameter settings. These settings are explained in Currency differences.

Unrealized currency differences can occur when:

Open invoices are present.
Currency differences are written off, and the exchange rate of a currency has changed.

If part of the invoice has been paid, LN calculates the currency difference over the remaining open invoice amount, using the following formula:

unrealized curr. difference = open invoice amount * (invoice rate/rate factor - new rate/rate	factor)

The unrealized currency profits or losses are posted to the ledger accounts specified for the financial business partner group.

Example

The purchase invoice amount is EUR 10,000

The invoice currency is EUR.

The home currency is USD.

The invoice date is 2007-01-01.


Exchange rates :
Start date	Rate EUR to USD	Invoice amount in USD
2007-01-01	1.362	USD 13,6210
2007-02-01	1.264	USD 12,6423
2007-02-15	1.269	USD 12,6904

The rate factor is 1.

The Write Off Currency Differences (tfacp2240m000) session is run on 2007-02-10.

On 2007-02-10, the calculated unrealized currency difference is:

10,000 * (1.362 - 1.264) = USD 978.00

For sales invoices, this currency difference would be an unrealized currency loss. Because this invoice is a purchase invoice, this difference is an unrealized currency profit.