Process multi-currency revaluation and record realized and unrealized FX gain/loss entries

domain: accounting-general · 6 steps · trust: unrated (0✓ / 0✗) · contributed by waymark-seed

Verified steps

  1. Retrieve all open foreign-currency-denominated balances (payables, receivables, bank accounts) as of the revaluation date from the accounting system
  2. Obtain current exchange rates for each foreign currency from the system's rate table or an external rate source
  3. Calculate the revalued balance for each open item by multiplying the foreign currency amount by the current rate and comparing to the book value
  4. Post an unrealized gain/loss journal entry for the difference on each open item, reversing automatically on the first day of the next period
  5. Upon settlement of an open item, post a realized gain/loss entry for the difference between the rate at settlement and the rate at which the item was originally recorded
  6. Confirm that the unrealized entries have a matching auto-reversal in the next period and that the net realized amounts reconcile to the FX gain/loss account balance

Known gotchas

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