Payment Journals and Foreign Currency give wierd GL entries


We have 2 vendors that use foreign currency. Their invoices are entered in British Pounds, and are paid from our USD bank account. The AP clerk follows the same process each time a payment journal is created, but we’re seeing different results in the GL postings for some of these transactions. Posted below are 2 paid invoices from the same payment journal. The lines in Red text are the ones I can’t understand. There should only be 3 entries, the amount in USD at the time the invoice was posted, the amount in USD at the time the invoice was paid, and the currency gain/loss like the last transaction in black text.

Document Type G/L Account No. Description Amount Bal. Account Type Bal. Account No.
Payment 10500 AP0004712 -2,632.49 Vendor V00179
Payment 20000 AP0004712 2,814.68 Bank Account BN001
Payment 57000 AP0004712 1,640.41 G/L Account
Payment 57000 AP0004712 -182.19 G/L Account
Payment 20000 AP0004712 -1,640.41 Bank Account BN001
Payment 10500 AP0004790 -334.49 Vendor V00179
Payment 20000 AP0004790 346.22 Bank Account BN001
Payment 57000 AP0004790 -11.73 G/L Account

I don’t know where the system is getting the 1640.41 figure from, it doesn’t relate to any of the amounts on the invoice, the only other place I see it is when I navigate to the detailed vendor ledger entries its showing as an unrealized gain??

Entry Type Document Type Cur. Amount Amount ($) Initial Entry Due Date
Initial Entry Payment BPD 1,818.00 2,632.49 5/18/2010
Unrealized Gain Payment BPD 0 -1,640.41 2/28/2010
Realized Gain Payment BPD 0 182.19 5/18/2010
Application Payment BPD 1,818.00 2,814.68 2/28/2010
Application Payment BPD -1,818.00 -2,814.68 5/18/2010
Initial Entry Payment BPD 231 334.49 5/18/2010
Realized Gain Payment BPD 0 11.73 5/18/2010
Application Payment BPD 231 346.22 3/21/2010
Application Payment BPD -231 -346.22 5/18/2010

Can anyone explain why we’re getting these mystery GL entries on some of the payments but not all? How can I eliminate this issue?

Thanks Much


System reverse unrealized gains/losses before posting realized… When you run Adjust Exchange Rate periodic activity system posts Unrealized Gain/Loss. When you process Payment and apply transactions system reverse unrealized and post realized.

I think you have wrong exchange rate setup in the exchange rates table for adjustments.

Check fields “Adjustment Exch. Rate Amount” and “Relational Adjmt Exch Rate Amt” in “Exchage Rates” table for the day when you rund Adjust Exchange Rate - most likely you have reverced numbers…

Below are the numbers from the Exch Rates table. I think they’re in there correctly. Why would the system post an unrealized gain for one of the invoices in the initial post, but not the other one. They were both posted on the same day at the same exchange rate, there should have been an unrealized gain for both between the date they were entered and the date they were both paid. Also, I can’t see how the system calculated an unrealized gain of $1640 on an invoice for 1818 pounds using any of the numbers in the exchange rate table below?

Starting Date Currency Code Relational Currency Code Exchange Rate Amount Relational Exch. Rate Amount Adjustment Exch. Rate Amount Relational Adjmt Exch Rate Amt Fix Exchange Rate Amount
2/8/2010 BPD 0.6421 1 1.5575 1 Currency
2/16/2010 BPD 0.6333 1 1.5789 1 Currency
2/22/2010 BPD 0.6459 1 1.5482 1 Currency
3/1/2010 BPD 0.6672 1 1.4987 1 Currency
3/8/2010 BPD 0.6639 1 1.5062 1 Currency
3/15/2010 BPD 0.6651 1 1.5036 1 Currency
3/25/2010 BPD 0.6714 1 1.4894 1 Currency
3/29/2010 BPD 0.6676 1 1.4979 1 Currency
4/6/2010 BPD 0.6591 1 1.5172 1 Currency
4/13/2010 BPD 0.6503 1 1.5377 1 Currency
4/20/2010 BPD 0.6514 1 1.535 1 Currency
4/26/2010 BPD 0.6471 1 1.5454 1 Currency
5/3/2010 BPD 0.6558 1 1.5248 1 Currency
5/17/2010 BPD 0.6906 1 1.448 1 Currency
5/26/2010 BPD 0.6957 1 1.4375 1 Currency
6/10/2010 BPD 0.6816 1 1.467 1 Currency

Can you tell me if these numbers are reversed?


Your exchange rates reveresed… “Adjustment Exch. Rate Amount” and “Relational Adjmt Exch Rate Amt” has to have the same values as “Exch. Rate Amount” and “Relational Exch Rate Amt” fields…

I do not think invoices was posted at the same day…

Exch.Rate Amt & Adjustment Exch.Rate Amt must be 1 or 100 or 1000 (and both equal) and means for how many FCY units the rate is set, for example:

1 LCY = 1 FCY @ rate Y.XXXX
1 LCY = 100 FCY @ rate Y.XXXX (used if FCY is relatively cheap to LCY)

Relational Exch. Rate Amount & Relational Adjmt Exch Rate Amt is the actual rate, [(Y)Y.XXXX] and these two must be equal, too.

Don - so your data in this table is wrong. I wonder how your accountants haven’t noticed earlier, that figures are wrong, as your screenshot shows you’ve followed this wrong pattern from begining.

We got some bad information about the currency set up. The currency adjustment batch was taking some combination of the exch rate and the adjustment exchange rate to create the unrealized gain postings. That’s why the amounts didn’t make any sense.

Thanks for the help and the quick responses.