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Define rules for FX contracts

Posting rules for FX contracts are complicated and this is only an example of how it can be done.

The accounts used in the examples below may not be relevant for your chart of accounts and accounting principles. You need to generate postings against dummy accounts only if your accounting software expects each transaction to net to zero. This is because the two legs of the contract are treated as two separate transactions in FA.

FX spot

Name

Account

Posting date

Credit/Debit

Charge type

Comment

Cashflow in + CASH

1111 : Asset account

Settlement date

Credit

+ Total

To capture result on currency accounts from FX Spot settlement inflow.

8340 : FX profit & loss

Settlement date

Debit

+ Total

8341 : Dummy currency account

Settlement date

Credit

+ Total - C.loss + C.profit

ACC : Accounts based on currency

Settlement date

Debit

+ Total - C.loss + C.profit

Cashflow out + CASH

1111 : Asset account

Settlement date

Debit

To capture result on currency accounts from FX Spot settlement outflow.

8340 : FX profit & loss

Settlement date

Credit

8341 : Dummy currency account

Settlement date

Debit

ACC : Accounts based on currency

Settlement date

Credit

FX forward

Name

Account

Posting date

Credit/Debit

Charge type

Comment

Cashflow in + CURRENCY

8340 : FX profit & loss

Settlement date

Debit

+ Total

To capture FX result from inflow to Currency Account from FX Forward settlements.

8341 : Dummy currency account

Settlement date

Credit

+ Total - C.loss + C.profit

ACC : Accounts based on currency

Settlement date

Debit

+ Total - C.loss + C.profit

ACC : Accounts based on currency

Settlement date

Credit

+ Total

Cashflow in + DISCOUNT

1111 : Asset account

Settlement date

Credit

+ Total + C.loss - C.profit

To capture realized gain on long FX Forward positions.

3570 : Realized gain FX Forwards

Settlement date

Credit

+ C.profit

4570 : Realized loss FX Forwards

Settlement date

Debit

+ C.loss

ACC : Accounts based on currency

Settlement date

Debit

+ Total

Cashflow out + CURRENCY

8340 : FX profit & loss

Settlement date

Debit

+ Total

To capture FX result from outflow from Currency Account from FX Forward settlements.

8341 : Dummy currency account

Settlement date

Credit

+ Total - C.loss + C.profit

ACC : Accounts based on currency

Settlement date

Debit

+ Total - C.loss + C.profit

ACC : Accounts based on currency

Settlement date

Credit

+ Total

Cashflow out + DISCOUNT

1111 : Asset account

Settlement date

Debit

+ Total - C.loss + C.profit

To capture realized gain on short FX Forward positions.

3570 : Realized gain FX Forwards

Settlement date

Credit

+ C.profit

4570 : Realized loss FX Forwards

Settlement date

Debit

+ C.loss

ACC : Accounts based on currency

Settlement date

Credit

+ Total

Value adjustment + DISCOUNT

1368 : Unrealized gain FX Forwards

Settlement date

Debit

- Total

To capture value change in FX Forward positions.

5528 : Change unrealized gain FX Forwards

Settlement date

Credit

- Total