JE-130 Apr 2026Adjustingposted
Remeasure the open euro receivable at the closing rate.
| Account | Dimensions | Debit | Credit |
|---|---|---|---|
| 1100 Accounts receivable | 280 US Dollar | ||
| 4910 Foreign exchange gain | 280 US Dollar | ||
| Totals | 280 US Dollar | 280 US Dollar | |
Balanced.
Journal entry for an unrealized FX revaluation
At each month-end, remeasure open foreign-currency receivables and payables at the closing rate: debit the receivable and credit Foreign exchange gain when the dollar value has risen, or the reverse for a loss. The gain is unrealized until the item settles.
- Booked at
- 1.0850 = $21,700
- Closing rate
- 1.0990 = $21,980
- Unrealized gain
- $280
- Entity
- Illustrative company
- Basis
- Accrual
- Currency
- USD
- Period
- April 2026
The worked example
The same 20,000.00 EUR invoice, booked at 1.0850 for $21,700, is still open on April 30 when the closing rate is 1.0990. Remeasured, it is worth $21,980: a $280 unrealized gain.
Adjusting entry · April 30, 2026
What the entries do to the accounts
Every entry above posted to the ledger, starting from zero balances: the net debit or credit each account is left with. Debits equal credits, so the books still balance.
| Account | Debit | Credit |
|---|---|---|
| 1100 Accounts receivable | 280 US Dollar | |
| 4910 Foreign exchange gain | 280 US Dollar | |
| Totals | 280 US Dollar | 280 US Dollar |
Why it is booked this way
A euro receivable is worth a different number of dollars every day. At month-end the books are brought to the closing rate so the balance sheet shows what the receivable is worth now.
The gain is unrealized because the euros have not been converted. When they are, the realized figure is measured from the last remeasured value, not from the original invoice rate.
Common mistakes
- Remeasuring non-monetary items like prepaids and fixed assets.
- Revaluing at month-end and then also booking the full realized difference on settlement against the original rate, so the movement is counted twice.
Questions
- Does an unrealized gain go through the P&L?
- Yes. Under ASC 830 monetary items in a foreign currency are remeasured at the closing rate each balance sheet date, and the change goes to the P&L whether or not it has settled.
- Which balances are remeasured?
- Monetary items — cash, receivables, payables, loans. Inventory, fixed assets and prepaids stay at historical rates.
Terms on this page
Work with this entry
The tool that computes the schedule, the concept behind it, the entries that come next and the components that render them.
- FX conversion & gain/lossThe rate is the one in your policy, so you type it. No live rate, no network call, no stale surprise. Put your own figures in and get the schedule behind this entry.Tool
- Wise, explained for foundersBalances in several currencies, mostly used to pay people and vendors abroad.Doc
- Realized FX gain or loss vs unrealized FX gain or lossA realized FX gain or loss is locked in when a foreign-currency item is settled; an unrealized one is the paper change in an item still open at a balance-sheet date — both go through the P&L under ASC 830.Compare
- Functional currency vs presentation currencyFunctional currency is the currency of the economic environment an entity operates in, in which its books are kept; presentation currency is the currency its financial statements are reported in — they differ when a group consolidates foreign subsidiaries.Compare
- Journal entry for a realized foreign exchange gain or lossBook a foreign-currency invoice at the rate on the invoice date. When it is collected at a different rate, debit Cash for the dollars received, credit Accounts receivable for the dollars originally booked, and book the difference as a realized foreign exchange gain or loss.Entry
- Journal entry for a sale on accountFor a sale on credit, debit Accounts receivable and credit Revenue for the price; under a perpetual inventory system also debit Cost of goods sold and credit Inventory for what the goods cost. When the customer pays, debit Cash and credit Accounts receivable.Entry
- Journal entry for accrued revenueAt month-end, debit Unbilled receivables and credit Revenue for work delivered but not yet invoiced. When the invoice goes out, debit Accounts receivable and credit Unbilled receivables.Entry
- FxExposurePosition by currency with unrealized gain/loss.Component
- JournalEntryDebit and credit as two columns. No signed-column variant.Component
An illustrative company, not anyone’s real books. Every figure on this page is computed from the inputs in the example and posted by the same functions as the journal entry balancer. General information for US companies under US GAAP, not accounting or tax advice.