Unrealized Gain/Loss Postings versus Balancing Adjustment Postings

When you revalue a currency (Values 1, 3, or 4) using the transaction currency (Value 2) as the source, you generate unrealized gain or loss postings. This is because the transaction currency is comprised of 'real' currency values, not calculated, such as amounts printed on a supplier invoice. Thus, when the revaluation process posts the difference due to exchange rate movement since the originating transaction was posted, this difference is effectively a gain or a loss that was not realized at the time the transaction was posted.

When you revalue between the base, the second base/reporting or fourth currency (values 1, 3, or 4), not involving the transaction currency (Value 2), you generate balancing adjustment postings.