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Accounting · Definition

Exchange Rate Gain or Loss

The profit or loss caused by currency movement between transaction and settlement.

When a foreign-currency invoice is settled at a different rate than when it was recorded, the difference is a realised exchange gain or loss. Revaluing open balances at period end produces unrealised ones.

For importers this line can rival operating margin in size. Recognising it separately keeps trading performance distinguishable from currency movement.

Also called

  • FX gain/loss
  • forex difference

Related terms

Multi-Currency Accounting

Recording transactions in foreign currencies alongside a base reporting currency.

Hedging

Locking in a future rate or price to reduce exposure to movement.

Landed Cost

The total cost of a product once it arrives, including freight, duties and fees.

Month-End Close

The process of finalising and locking a period’s financial records.

More in Accounting

Accounts Payable (AP) Accounts Receivable (AR) Accrual Accounting Accrued Expense Aging Report Bad Debt Provision Balance Sheet Bank Reconciliation

Exchange Rate Gain or Loss is not just a definition here

Accounting runs on this vocabulary every day in AWRA OpsHub — 51 of our 257 glossary terms describe things the platform actually does.

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