Let me share some insights on why the unrealized Profit or Loss account affects receivables and payables from a previous period, Mohamed Essam.
Once you record a payment, QuickBooks Online (QBO) automatically calculates the difference between the home currency values of the payment and the owed amount. This ensures you'll have accurate balances in your Accounts Payable (A/P) or Accounts Receivable (A/R).
The unrealized profit or loss account will affect the receivables and payables from a previous period (even though the transactions were paid in the same period) if there's a home currency adjustment and item adjustment such as projects. The program shows the effect of a Home currency adjustment on A/P or A/R as an unrealised gain or loss.
To verify this one, we can run the Profit and Loss report. Just click the amount displayed for the account you're reviewing to open the Transaction Report for that account. Then, make sure the payment date matches the same period.
If the unrealized gain or loss is incorrect and affects the receivables and payables from a previous period, we can create a home currency adjustment to fix the issue. Here's how:
- Go to Settings, then select Currencies.
- Find the currency you want to adjust.
- Under the Actions column, click the small arrow ▼ icon. Then, click Revalue Currency.
- Choose a date (today or a day in the past) to run a currency revaluation.
- Select whether you'd like the revaluation to be based on the market exchange rate or a rate you specify.
- Tap on the account(s) you want to apply the revaluation to.
- Press Revalue. To stay accurate and compliant, we can only save one exchange rate per day per account. We use this exchange rate to calculate unrealised gains and/or losses.
Once done, we can run some reports like the Transaction Detail or customize the Customer Balance Detail and Vendor Balance Detail to view unrealized gains or losses. You can check out this article for more details: Frequently Asked Questions about Home Currency Adjustments.
If you have any further questions regarding unrealised gain or loss or any multicurrency-related concerns, feel free to reach out. I'll be here to help you out. You have a good one.
