Final unrealized forex

Discussion in 'General Accountancy Discussion' started by MYKL, Dec 5, 2018 at 12:05 AM.

  1. MYKL


    Dec 4, 2018
    Likes Received:

    Would the reversal of the unrealized forex be realized upon payment?

    Say in FY20X7 I had a GBP1mil Debtor valued at 1.2USD which is the revalued to 1.3USD at the end of the year.

    Do I have a 0.1mil unrealized gain which I reverse out in the beginning of the subsequent year.

    Then, the debtor makes payments in FY20X8 when exchange rate is 1.1USD with a realized loss of 0.1mil and I am left with:

    USD0.1mil realized loss

    USD0.1mil unrealized loss (reversal of gain)

    In the FY20X8 financial statements is it acceptable to record an unrealized loss on a zero balance foreign currency account since the payment has been made? Or should the unrealized loss be realized as well?
    MYKL, Dec 5, 2018 at 12:05 AM
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  2. MYKL

    kirby VIP Member

    May 12, 2011
    Likes Received:
    Unrealized loss must be realized when transaction is settled. So yes.
    kirby, Dec 5, 2018 at 3:59 PM
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