Work out foreign exchange gain or loss instantly with clear inputs, formula shown and shareable results.
An unhedged foreign currency invoice creates exposure between booking and settlement. A depreciating home currency helps an exporter with a receivable and hurts an importer with a payable, by exactly the same amount.
Exchange difference
Difference = amount × (settlement rate - invoice rate), signed by whether the position is receivable or payable
Figures are estimates based on the inputs given. Bank charges, regulatory minima and market rates change and differ between institutions and jurisdictions. This is not financial advice — confirm with your bank or treasury policy.
As an exchange gain or loss in the profit and loss account, separate from operating margin.
By booking a forward contract at the invoice date, which fixes the settlement rate and eliminates the difference.