Foreign Currency Transactions
- This topic has 3 replies, 2 voices, and was last updated 1 year, 4 months ago by Lynn Roden.
I understand very well that the Realized gain/loss account will be closed in the income statement as an operating income (gain/loss).
I understand very well that the Unrealized gain/loss account will be closed in the income statement as a non-operating income (gain/loss).
First Question : Am i correct in the above two statements?
in Hock text book page 109 this paragraph ( • On every financial statement date prior to settlement of the receivable, the balance in the receivable account is adjusted to its amount at the current exchange rate on the statement date, using the spot rate in effect on that date. The unrealized exchange rate gain or loss is recorded in the current period income statement as a financial or non-operating gain or loss, not an operating gain or loss.)
Second Question: what does Mr. Hock mean ( as a financial OR as a non-operating gain/loss) ?
thanks in advance
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