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- Calculate the cross rate of the EURO to the accounting currency (US Dollar).
4.5/3.6 =1.25 - Multiply the transaction amount, 1000, by the cross rate, 1.25. The resulting amount is $1250.
Calculation
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Modes
The gains or losses resulted from fluctuations of exchange rates (that is, exchange differences) can be calculated in the following two modes:
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To switch between these calculation mode, you can use the Calculate Exchange Rate Differences on Month Closing Only option on the Administration > Settings > Accounting form.
Month-End Calculation
Month-end calculation of exchange rate differences is performed in both calculation modes.
To include the calculation of exchange rate differences in the month-end closing process, you need to select the Calculate Exchange Rate Differences option on the Accounting > Service Tools > Month-End Closing form. You can review the results of the calculation and corresponding journal entries in the generated Month-End Closing document when you click the 
button. For more information on month closing, refer to Month-End Closing Service Tool.
During month-end closing process, balances of the cash accounts that following accounts (if they are maintained in foreign other currencies are revalued in than the accounting currency) are revalued by using the exchange rates on the date of the month closing and compared to their balances in the accounting currency on the last revaluation date - any differences are recorded as exchange rate differences. For each document with open balance in a foreign currency (in the Accounts Payables and Receivables), the current (month-end date) exchange rates:
- The Cash and Cash Equivalents section of COA: cash and bank accounts, the PDCs Received account.
- The Trade and Other Current Receivables section of COA: the Current Trade Receivables from Customers account, the Deposits Paid to Suppliers account.
- The Trade and Other Current Payables section of COA: the Current Trade Payables and Deposits from Customers accounts.
- The Staff Settlements (Liability) section of COA: the Staff Salary Settlements and Unpaid Employee Business Expenses accounts, the PDCs Issued.
- The Staff Settlements (Assets) section of COA: the Prepaid Employee Business Expenses account.
Revaluation of accounts is performed on per document (transaction) basis.
Gain or loss resulted from exchange rate fluctuations for a document is calculated as follows:
1. The document amount is revalued based on the exchange rate of the foreign currency with respect to the accounting currency on the date of month end, and any gain .
2. Gain or loss is determined as the difference in between the amounts document amount in the accounting currency on the month-end date and the document amount on the last revaluation date that can be the transaction date if the document was posted during the current month or the previous month-end closing date if the document was posted earlier. If the difference is greater than 0, the gain is recorded; otherwise, the loss is recorded
Exchange differences for transactions that were paid for during the period are calculated on the month end date.
Also, unpaid salaries in foreign currencies are revalued using the exchange rates in effect on the month end date.
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Calculation during the current period
If the Calculate Exchange Rate Differences on Month Closing Only option is not selected on the Administration > Settings > Accounting form, the exchange rate differences are calculated additionally during the period as follows:
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- If the calculation is initiated by an outgoing or incoming payment, for instance Cash Receipt or Cash Payment, the amounts of exchange differences are calculated for the particular document if the exchange rate on the date of payment differs from the rate on the date of original transaction (sales or purchase). Again, simultaneously, all the foreign currency transactions associated with the related contract, balances of GL accounts (involved in the transaction) are revalued based on this rate, and this date becomes the last foreign currency revaluation date for the transactions that are adjusted.
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Default GL Accounts
If the total amount of gain or loss (incurred due to exchange rate differences) is in the interval (-0.005, +0.005) no gain or loss is registered.
If the resulting sum is equal or greater than 0.005, the sum is posted to the default account selected in the Gains on Exchange Differences column on the Accounting > See Also > GL Accounts by Default form. You can use the same default "Gain" account for all entities, or you can select separate accounts for entities
If the resulting sum is equal or less than -0.005, the sum is posted to the default account selected in the Losses on Exchange Differences column on the Accounting > See Also > GL Accounts by Default form. You can use the same default "Loss" account for all entities, or you can select separate accounts for entities