Foreign currency revaluation

[Former Member]

Hi All,

I have posted two invoices one with usd 1000$, exchange rate Rs 44.42,Invoice value is Rs 44,420/- other with EUR 1000, exchange rate Rs 64, Invoice value is Rs 64,000/-. Now i have reduced the EUR exchange rate with a rupee and higher USD with a rupee and run revaluation. the entries it posted are

USD Loss

1) Dr. Loss a/c 1000

Cr. Adjust a/c 1000

reverse entry

2) Dr. Adjust a/c 1000

Cr. Loss a/c 1000

EUR Gain

1) Dr. Adjust a/c 1000

Cr. Gain a/c 1000

Reverse Entry

2) Dr. Gain a/c 1000

Cr. Adjust a/c 1000

Now my question is What is this reverse entry. How will i know my loss and gain when it it reversed immediately. Can any one tell me the exact process of revaluation with entries.

Thanks in advance

Sarayu.

[Former Member]

Still i need clarification

[Former Member]

Hi,

We book the entry for reporting purpose only since it is unrealised at that point of time. And usually the reversal entry is booked on the first day of the subsequent period, and hence the Balance Sheet as on the end of current period will show the unrealised gain/loss.

Rgds

Balla

[Former Member]

Hi,

That means once u take balance sheet u wil reverce the entry, if so when i am actually paying it what could be me gain/loss how will u book the it.

Thanks

Sarayu