Gains and Losses Accounts

Use the Gains and Losses Accounts function to specify the accounts to which to post the realized and unrealized gains and losses amounts that result from fluctuating exchange rates. This function is available and appears on the menu only if you use multicurrency with this company.

Because several days or weeks can elapse between the time you enter an invoice and the time you enter its corresponding payment, Traverse converts currency amounts using the most current daily exchange rate (or the rate you enter) as you make those entries. In doing so, Traverse automatically tracks the gains or losses that result from fluctuating exchange rates. When you post transactions or payments or complete period-end processing, Traverse creates entries in the realized and unrealized gains and losses accounts you specify in this function to record those gains and losses.

Realized gains and losses represent the additional funds you received or lost due to fluctuating exchange rates for completely resolved transactions (that is, those with zero balances). These are the actual values that are recorded as you post transaction information.

Unrealized gains and losses are the funds that your company would receive or lose if all transactions were complete at that moment. Traverse creates temporary unrealized gains and losses entries to balance accounts and close the books during period-end processing. These entries are automatically reversed in the next period so that your account balances are correct and to make way for the realized gains and losses that will be recorded as you post information during normal processing.

You can just set up one set of Accounts for Gain/Losses from all foreign currencies, or you can have different accounts for each foreign currency if you want.

Name Name NameAcct ID NameAccount Description NameSec on Inc Stmt Name Acct Type Name Debit/Credit
Realized Gaines 00-000-4030
00-000-4031
00-000-4032		 Realized Gains Acct (Dollar)
Realized Gains Acct (Euro)
Realized Gains Acct (Peso)		 Other Income 715 Credit
  Losses 00-000-5300
00-000-5301
00-000-5302		 Realized Losses Acct (Dollar)
Realized Losses Acct (Euro)
Realized Losses Acct (Peso)		 Other Expenses 815 Debit
             
Unrealized Gaines 00-000-9040
00-000-9041
00-000-9042		 Unrealized Gains Acct (Dollar)
Unrealized Gains Acct (Euro)
Unrealized Gains Acct (Peso)		 Other Income 715 Credit
  Losses 00-000-9050
00-000-9051
00-000-9052		 Unrealized Losses Acct (Dollar)
Unrealized Losses Acct (Euro)
Unrealized Losses Acct (Peso)		 Other Expenses 815 Debit

Use the Default account record to set up default accounts to use for all currencies. When you post gains and losses, amounts are posted to the accounts you specify here regardless of which foreign currencies they are in. Use the Currencies records to set up separate realized and unrealized gains and losses accounts for each foreign currency you use.

Creating a Gains and Losses Account

  1. Click the New button, on the toolbar, to open a blank gains and losses record.
  2. Select a currency from the Currency ID field.
  3. Select accounts to use for the selected currency from the Realized Gains Account, Realized Losses Account, Unrealized Gains Account, and Unrealized Losses Account fields. Traverse automatically posts Gains and Losses amounts to these Accounts when you post transactions or payments and when you perform period-end processing.
  4. Close the screen to save the new gains and losses account record.

Editing a Gains and Losses Account

  1. Determine a gains and losses account to edit.
  2. Edit the Account fields as necessary.
  3. Close the screen to save any changes made to the gains and losses account record.

Deleting a Gains and Losses Account

  1. Select a gains and losses account to delete from the Currency ID field.
  2. Click the Delete button, on the toolbar, to delete the selected gains and losses account.
  3. Click Yes at the "Are you sure you want to delete selected record(s)?" prompt.