Hello,
I'm wondering how GP users who have bank accounts held in foreign currencies record realized gains/losses separate from unrealized gains/loss.
In my situation, the company has USD as functional currency and one of its checkbooks in GP is held in CAD. They only do bank transactions in this account (no A/R or A/P). I've set up a revaluation option in GP to revalue the CAD G/L cash account and record a UNREALIZED gain/loss at the end of each month.
The question is, how to record a REALIZED gain/loss when money is withdrawn from this account? Here’s an example:
Jan – Bank Increase Adjustment = 1,000 CAD (.95 Rate)
Feb – Bank Increase Adjustment = 1,000 CAD (.90 Rate)
Mar – Bank Increase Adjustment = 1,000 CAD (.85 Rate)
April – Withdrawal $2,500 CAD to USD (.99 Rate)
Since they are getting back more in the equivalent USD than they put in, a gain has been realized, right?. But when the bank withdrawal is posted, no gain/or lost is recorded by GP. If I run the Revaluation and set it as realized, won't some of that gain/loss be due to the balance that is still in the account and which should be recorded as unrealized? How do I get GP to record a realized gain on the withdrawal and an unrealized gain/loss on the remaining $500 at the end of April?
Or, should the gain/loss on the withdrawal be handled in a different way? How do other GP users record such a transaction?
Thanks in advance for your thoughts!,
Liane
