Foreign Exchange Gain or Loss (advanced)

This video shows how to calculate a foreign currency gain or loss on an export sale when the company's fiscal year-end occurs before the company collects the payment. This is more complicated than the typical scenario because it requires an adjusting journal entry to be made on the Balance Sheet date to account for any foreign currency gain or loss at that time. Then when the payment is collected, an additional foreign currency gain or loss may be recognized.

Companies typically categorize foreign currency gains or losses as "Other Income" or "Other Expenses."—
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[yopej]

Why is it recorded directly as realized gain in Dec. 31? where in fact the actual payment was received in February? Why not unrealized forex gain on Dec.?

[jyabuki]

Thanks for your helpful videos. Any chance you could cover forward contracts?

[patrickghazarian]

Thank you much. Very helpful! Look forward to learning more.

[SAF]

sir so if the spot rate changes in january or shoud i say we cIose our books in janury and the cIosing exchange rate chanes we woud need to do another journaI enetery for jan right?

[ivornworrell]

*Beautifully explained thank you, but am I correct in saying that the bottom line result of this transaction is that a loss on sales of $1, 000.00 was incurred (because the initial rate was US$0.84 to one Euro but the actual amount collected was @ the rate of US$0.83 to one Euro), but because the transaction was conducted in a foreign currency, that is why the $1, 000.00 falls under Gain/Loss on Foreign Exchange, in order that the financials reflect a true & fair view?*

[KumR]

What is account type of "Unrealized Loss or Gain" account ? Assets or Expense ?

[KumR]

Thanks sir but wont they have to book accruals before/during year end ?

[braulioprado]

Hi Michael, Firstly I would like to express my gratitude for your time and effort in sharing this knowledge. Secondly, I was wondering if you have any videos about IFRS? I'm currently studying a CPA subject- financial reporting. Lots of accounting standards to grasp and I find quite tricky as I'm a visual person. Do you have any video about business combination and financial instruments? B