Analyze the result of processing foreign currency payments on transactions
Processing payments and cash receipts will result in the creation of a payment customer ledger entry or a payment vendor ledger entry.
When multiple currencies are involved, three detailed customer ledger entries are created when a payment is posted and applied against an invoice customer ledger entry:
An entry with an Entry Type of Initial Entry that contains the amount and currency of the payment. This entry matches the single entry for the payment on the Customer Ledger Entries page with Payment as the Document Type.
An entry with an Entry Type of Application Entry that is the application for the invoice customer ledger entry. This entry has the due date and is in the currency of the invoice to which it applies. Additionally, it is posted to reduce the Remaining Amount on the invoice customer ledger entry.
An entry with an Entry Type of Application Entry that is the application for the payment customer ledger entry. This entry has the same currency and due date as the Initial Entry. However, the Amount has the opposite sign. This entry is posted to reduce the Remaining Amount on the payment customer ledger entry.
Additionally, when both payment and invoice customer ledger entries are processed with the same foreign currency and the exchange rate has changed between the time of invoice and payment, an additional detailed customer ledger entry will be created:
- An entry with an Entry Type of Realized Gain or Realized Loss that contains the amount in LCY that is the difference between the LCY amount of the payment customer ledger entry and the LCY amount of the invoice customer ledger entry. This amount is posted to the general ledger account that is specified in the Realized Gains Acc. field or the Realized Losses Acc. field on the Currencies page.
Applying a payment with a vendor ledger entry will result in analogical, detailed vendor ledger entries.