Currency Gain Loss Accounts (CU03.1)
Use Currency Gain Loss Accounts (CU03.1) to define realized and unrealized gain and loss accounts for currency relationships you want a company to recognize. You must set up one set of currency gain and loss accounts, which includes: realized gain, unrealized gain, realized loss, and unrealized loss.This set of accounts is used for all currency relationships, unless you select different gain and loss accounts for a specific currency relationship and/or system code.
More Information
The Currency system posts amounts to a realized or unrealized gain or loss account if there is a difference between the beginning and ending currency value of a transaction. For example, if you define an invoice with an exchange rate, and the rate changes by the time you pay the invoice, the system posts the difference to a gain or loss account.
When open transactions exist at the end of a period, the ending exchange rate is used to compute the company's currency exposure. If a negative (credit) variance exists between the beginning exchange value of a transaction and the ending exchange value of that transaction, the variance amount is posted to the Unrealized Gain Account. If a positive (debit) variance exists between the beginning exchange value of a transaction and the ending exchange value of that transaction, the variance amount is posted to the Unrealized Loss Account.