Exchange Rate Adjustment of Profit and Loss Accounts


Please Explain the conept of Adjust Profit & Loss Accounts while running Exchange Rate Adjustment. My understanding of Exchange Rate Adjustments is for Foreign Currency Balance Sheet Accounts having a balance.

The balance is made up of outstanding liabilities that, if you change your exchange rate daily, are at mixed rates, obviously when payments are made they are realized, if however from an accounting perspective you need to report a period end it is possible to revalue all open transactions in a foreign currency to the current rate to give you a better picture of the current situation.