When a foreign currency payment is saved, Banking Entry Create calculates the realized gain or loss in base currency, and posts the gain or loss to the realized gain or loss system accounts, as appropriate. The gain or loss is the difference between the base currency value of the invoice at the time it was created and the base currency value of the invoice at the time of payment. In the case of a partial payment, the difference is prorated according to the amount paid.

When a domain uses a statutory currency, the system calculates the gain or loss twice, once for the base currency and a second time using the statutory currency—each using the most recent statutory exchange rate.

A domain has a base currency of Euros and a statutory currency of Polish Zloty (PLN). The company is trading with a customer in the United Kingdom and the transaction currency is GBP.

The British company buys 1000 GBP of goods from the Polish company, and tax is 20%.

The exchange rates are as follows:

 

The customer invoice is posted on August 1, 2014. The system uses the statutory exchange rate valid on the invoice date.

A customer payment is created on August 5, 2014, and the customer receives a 2% discount for paying early.

On August 12, 2014, the customer payment is allocated to the invoice in Banking Entry Create. A new statutory currency exchange rate of 5.3 becomes effective that day, and is applied to the allocated payment. This results in a realized gain in statutory currency, which is automatically posted to the Realized Gain system account.