PURPOSE
To show illustration of foreign exchange outright base with transaction date journal.
OVERVIEW
i. Foreign Exchange outright transaction revalued at period and using market spot rates.
ii. Settlement amounts are journalled to FRX: Deals Payables or Receivables accounts in the general ledger.
TRANSACTION DETAILS
| Accounting Base Ccy |
| Trade ID |
| Trade Date |
| Value Date |
| Transaction |
| Against Currency Settlement |
| Buy Amount |
| Sell Amount |
| SGD |
| FRX1001 |
| 25-Mar-03 |
3-Apr-03 |
Sell GBP |
SGD |
| SGD 2,550,000.00 |
GBP 1,000,000.00 |
SUMMARY OF JOURNALS
| ID | Date | Description |
|---|---|---|
| J1 | 25-Mar-03 | Trade Date |
| J2 | 25-Mar-03 | Trade Date |
| J3 | 31-Mar-03 | Month end revaluation |
| J4 | 1-Apr-03 | Reversal of Month end revaluation |
| J5 | 3-Apr-03 | Settlement of Trade |
| J6 | 3-Apr-03 | Settlement of Trade |
| J7 | 31-Mar-03 | Month End Revaluation (Manual Update of MTM) |
J1 Trade Date
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 25-Mar-03 | B | FRX : Deals Receivables | SGD | 2,550,000.00 | 1.000000 | SGD | 2,550,000.00 | J1a |
| FRX1001 | 25-Mar-03 | B | FX Cash Clearing Account | SGD | -2,550,000.00 | 1.000000 | SGD | -2,550,000.00 | J1b |
J2 Trade Date
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 25-Mar-03 | B | FRX : Deals Payables | GBP | -1,000,000.00 | 2.550000 | SGD | -2,550,000.00 | J2a |
| FRX1001 | 25-Mar-03 | B | FX Cash Clearing Account | GBP | 1,000,000.00 | 2.550000 | SGD | 2,550,000.00 | J2b |
Note J2a: The exchange rate on trade date is 2.550000 (Contract rate).
J3 Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 31-Mar-03 | B | FRX : Deal Payables | GBP | 0.00 | 0.000000 | SGD | 42,250.00 | J3a |
| FRX1001 | 31-Mar-03 | P | FX - Unrealised Gains - FX Trade | GBP | 0.00 | 0.000000 | SGD | -42,250.00 | J3b |
Note J3b: The FX revaluation Profit/Loss is analysed as follows:
| Trade ID | Market Rate | Contract Rate | Non Base Amt | Profit/(Losses) |
| FRX1001 | 2.507750 | 2.550000 | -1,000,000.00 | 42,250.00 |
| Net P/L | 42,250.00 |
Market Rate is exchange rate on 31-Mar-03. See Exchange Rates below.
MTM can also be updated manually in the system for a FX trade. If the MTM is manually updated, please see J7 for the journals generated.
J4 Reversal of Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 1-Apr-03 | P | FX - Unrealised Gains - FX Trade | GBP | 0.00 | 0.000000 | SGD | 42,250.00 | J4a |
| FRX1001 | 1-Apr-03 | B | FRX : Deal Payables | GBP | 0.00 | 0.000000 | SGD | -42,250.00 | J4b |
J5 Settlement of Trade
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 3-Apr-03 | B | Cash at Bank | SGD | 2,550,000.00 | 1.000000 | SGD | 2,550,000.00 | J5a |
| FRX1001 | 3-Apr-03 | B | FRX : Deal Receiveables | SGD | -2,550,000.00 | 1.000000 | SGD | -2,550,000.00 | J5b |
J6 Settlement of Trade
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 3-Apr-03 | B | Cash at Bank | GBP | -1,000,000.00 | 2.502920 | SGD | -2,502,920.00 | J6a |
| FRX1001 | 3-Apr-03 | B | FRX : Deals Payables | GBP | 1,000,000.00 | 2.550000 | SGD | 2,550,000.00 | J6b |
| FRX1001 | 3-Apr-03 | P | FX - Realised Gains - FX Trade | GBP | 0.00 | 0.000000 | SGD | -47,080.00 | J6c |
Note J6a: Exchange rate on Value Date is 2.502920. See Exchange Rates below.
Note J6c: The FX Realised Profit/Loss is analysed as follows:
| Trade ID | Market Rate | Contract Rate | Non Base Amt | Profit/(Losses) |
| FRX1001 | 2.502920 | 2.550000 | -1,000,000.00 | 47,080.00 |
| Net P/L | 47,080.00 |
Market Rate is exchange rate on 03-Apr-03. See Exchange Rates below.
J7 Month End Revaluation (Manual Update of MTM)
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 31-Mar-03 | B | FRX : Derivative Liability Fair Value | SGD | 41,985.00 | 0.000000 | SGD | 41,985.00 | J7a |
| FRX1001 | 31-Mar-03 | P | FX - Unrealised Gains - FX Trade | SGD | -41,985.00 | 0.000000 | SGD | -41,985.00 | J7b |
Note J7b: The MTM value as at 31-Mar-2003 is maintained manually at the Foreign Exchange screen.
EXCHANGE RATES
The following rates were used for illustration.
Spot Rate
| Date | USD/SGD |
| 31-Mar-03 | 2.507750 |
| 3-Apr-03 | 2.502920 |
*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.
FREQUENTLY ASKED QUESTIONS
RELATED INFORMATION
CHANGE HISTORY
| Date | By | Changes |
|---|---|---|
| 28-Jul-2008 | CS | Creation. |
| 18-Oct-2016 | Cas | Reformatted. |
| 22-May-2017 | TS | Added journals for manual updating of FX MTM. |
| 24-Apr-2020 | LT | Re-formatting. |
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