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 |