To calculate the gain or loss, the system determines if the exchange rate changed between the invoice date and the receipt date as described:.
Prerequisites Your Home Currency must be configured before you can use this feature. Unrealized Gains and Losses A gain or loss is "unrealized" if the invoice has not been paid by the end of the accounting period. Customer Account Name Customer account name associated with the transaction. Customer Account Currency Currency of the customer account. Home Currency Home currency set on your tenant. Source Transaction Type Transaction type of the source transaction.
Can be the following values: Source Transaction Date Transaction date of the source transaction. Source Transaction Number Transaction number of the source transaction. Transaction Type Transaction type of the applied amount. Applied Amount Transaction Currency The applied amount in the transaction currency. Transaction Exchange Rate Date Exchange rate date of the transaction. For an Invoice, calculated as follows: Source Transaction Date Date when the source transaction occurred.
The value of this field is whichever is earlier of: Source Transaction Balance Currency Rounding The discrepancy caused by rounding the source transaction balance during currency conversion. Ending Transaction Balance Currency Rounding The discrepancy caused by rounding the ending transaction balance during currency conversion. Save as PDF Email page.
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Transaction type of the applied amount. Exchange rate date of the transaction. You set a processing option in the P03B Master Business Function to specify which date is used when you create an invoice. To summarize, the system determines which invoice date DGJ or DIVJ was used when the invoice was created and uses that as the invoice date to calculate the gain or loss. For foreign currency receipts, the potential exists for a standard gain or loss.
To calculate the gain or loss, the system multiplies or divides the invoice amount by the difference in the exchange rate from the time the invoice was entered and the time the payment was received. If an alternate currency receipt is involved, the potential exists for two gains or losses on a transaction:. An amount based on exchange rate differences between the foreign transaction currency and the domestic currency from the transaction date to the receipt date.
An amount based on exchange rate differences between the alternate receipt currency and the domestic currency. This gain or loss is the difference between:. The amount calculated by converting the alternate currency receipt directly to the domestic currency this is the amount that is actually deposited to or paid from the bank account. The amount calculated by converting the alternate currency receipt to the foreign currency to the domestic currency. In this example, a British company enters an invoice in U.
Because of the exchange rate risk, the potential exists for one gain or loss, based on the fluctuation of exchange rates between the domestic currency and the foreign currency at the time payment is received. The foreign currency invoice on January 1 is This amount is based on exchange rate fluctuations from the invoice date to the receipt date. When the receipt is entered, the receipt amount JPY is compared to the foreign and domestic invoice amounts to determine whether the debt has been satisfied.
Because the three currencies involved in the transaction fluctuate against one another, the potential exists for:. The foreign currency invoice on January 1 for The EUR amount is calculated as follows:. This amount is calculated using exchange rates on the receipt date.
It is based on the difference between converting the alternate currency directly to the domestic currency and converting the alternate currency to the foreign currency to the domestic currency. To record unrealized gains and losses on open foreign currency invoices, you can enter the gain and loss amounts manually in a journal entry or have the system create the gain and loss entries automatically. Unrealized gains and losses apply to unpaid invoices or the open portion of a partially paid invoice.
If you work with multiple currencies, you record unrealized gains and losses at the end of each fiscal period to revalue open foreign transactions.
This gives you an accurate picture of the cash position so that you can forecast and manage the cash flow. See Setting Up Exchange Rates. The system produces a report that displays: You specify whether you want to create journal entries for unrealized gains, losses, or both in a processing option.
The system assigns these journal entries the document type JX. This is the only document type that is used to adjust the domestic side of a monetary currency-specific account. The system creates only one journal entry per company. If you leave the processing option blank, the system does not create journal entries. You can also specify whether you want to create journal entries for unrealized gains or losses as of a specific date.
The system selects invoices that are open as of the date that you specify in a processing option and uses the F03B14 As Of Aging Server B03B to recalculate the domestic and foreign invoice amounts. Then, if specified in a processing option, the system creates journal entries for the unrealized gains or losses. With as of reporting, you can produce period-end reports to handle financial audit requirements such as balancing open invoices to accounts receivable trade accounts.
This is because the system first recalculates the open amounts as of the date that you specify and then it calculates the unrealized gains or losses. To prevent this, set up a different version of the report for each company with a different base currency. Setting up a separate version for each company has the added advantage of reducing the size of the report. Because of the exchange rate risk, the potential exists for an unrealized gain or loss at the end of the fiscal period when the open invoice USD is revalued against the euro EUR.
This amount is based on exchange rate fluctuations between the time that the invoice was created and the end of the fiscal period, when the invoice remained open. Specify the date to use to retrieve the exchange rate from the F table. If you leave this processing option blank, the system uses today's date.
Specify whether to create journal entries for accounts with calculated gains and losses. Create journal entries for accounts with calculated gains or losses. Create journal entries for accounts with calculated losses only. Create journal entries for accounts with calculated gains only.
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