Unrealized and realized gain and loss accounts

Realized gain and loss accounts are used to post the difference resulting from a change between the exchange rate in effect at the time a transaction is specified and the exchange rate in effect at the time the transaction is closed. For example, if you specify an invoice with an exchange rate, and the rate changes by the time you pay the invoice, then the system posts the difference to a realized gain or loss account.

Only one set of currency gain and loss accounts must be set up. This value will default for individual currency relationships, if the currency code and system code fields are left blank. If you want to track gains and loss by currency relationship, then you can set up specific currency gain and loss accounts for specific currency relationships and system codes.

Unrealized gains and losses occur if a transaction that was journalized 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 from the transaction date to the period ending date. Entries made to unrealized gain and loss accounts are reversed automatically (Accounts Payable or Accounts Receivable) or manually (General Ledger) in the subsequent period.

The General Ledger does not generate any entries to the realized gain or loss accounts. Accounts Payable and Accounts Receivable are the only applications using these accounts. General Ledger will post the values that are sent from the Accounts Payable and Accounts Receivable applications.