Nonbase currency invoice

This example shows the general ledger transactions created from a nonbase currency invoice paid with a base currency payment. Assume this information about the sample invoice:

Base currency USD - US Dollars
Invoice currency CAD - Canadian Dollars
Exchange rate on invoice date 2.000 (multiplier)
Exchange rate on date AP191 is run 3.000 (multiplier)
Exchange rate on payment date 3.500 (multiplier)
Invoice amount 100.00 (CAD)
Base invoice amount on invoice date 200.00 (USD)
Base invoice amount on report date 300.00 (USD)
Base invoice amount on payment date 350.00 (USD)

Unrealized Gain/Loss (AP191) Transactions

This program creates general ledger entries in the company base currency for an unrealized gain or loss. This example shows an unrealized loss because the exchange rate increased from the time the invoice was issued. (Note the change from 2.000 to 3.000.) A decrease would result in an unrealized gain.

Account Description Debit Credit
Unrealized Loss 100.00
Accounts Payable 100.00

Payment Closing (AP170) Transactions

After the invoice is paid, this program reverses the unrealized loss entry and creates a realized gain or loss general ledger transaction in the company base currency to reflect any exchange rate change between the invoice date and payment date.

Account Description Debit Credit
Accounts Payable 300.00
Realized Loss Account 150.00
Cash 350.00
Unrealized Loss Account 100.00