When a vendor invoice is paid in a non-reporting currency, it must be revalued using the exchange rate in effect on the check date. The difference between the translated value of the original invoice less the translated value at check date will create a gain or loss from currency transactions.

(Invoice FX Rate less Check FX Rate) X Amount Paid in Vendor Currency

• A positive value indicates a currency gain and will be booked as a Credit.

• A negative value indicates a currency loss and will be booked as a Debit.

Gains and losses will be booked to the 'Gain / loss G/L account' from Account Maintenance.

Gain/Loss Example:

A vendor invoice for $100.00 CAD has a G/L date of 11/15/15. This invoice was paid in full on 01/05/16.

Invoice G/L date 11/15/15 (1.00 USD = 1.301234 CAD → 1.00 CAD = 0.768501 USD)

Check date 01/05/16 (1.00 USD = 1.320910 CAD → 1.00 CAD = 0.757054 USD)

(FX rate on Check Date less FX rate on G/L date) X Amount paid in vendor currency

(0.768501 – 0.757054) X 100 = $1.14 USD

The cost of Canadian currency decreased between the G/L date of the invoice and the Check date. Here we have a gain on currency transactions.

The system will book this loss using the 'Gain/loss G/L account' defined on the bank account code.

Example: