Realized Exchange Gain or Loss

Realized exchange gains or losses occur when the base value of an invoice, when entered, is different from the base value of the transaction that pays the invoice.  An invoice entered in a foreign currency is cleared from the system by a payment of equal foreign currency value.  When the exchange rates used to convert the invoice and the payment into the base currency are different, an exchange gain or loss is realized in the base currency.  Accounting transactions are generated by the Payment Entry and Application Program to record the gain or loss, and its effect on the accounts receivable control account.  An exchange gain/loss account number assignment record on the Reference File (category 302) for each company/location specified the general ledger account number assigned to the generated transactions.