Foreign Exchange Outright Base – with TDate Journal

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

IDDateDescription
J125-Mar-03Trade Date
J225-Mar-03Trade Date
J331-Mar-03Month end revaluation
J41-Apr-03Reversal of Month end revaluation
J53-Apr-03Settlement of Trade
J63-Apr-03Settlement of Trade
J731-Mar-03Month End Revaluation (Manual Update of MTM)

J1                  Trade Date

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX100125-Mar-03BFRX : Deals ReceivablesSGD2,550,000.001.000000SGD2,550,000.00J1a
FRX100125-Mar-03BFX Cash Clearing AccountSGD-2,550,000.001.000000SGD-2,550,000.00J1b

J2                  Trade Date

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX100125-Mar-03BFRX : Deals PayablesGBP-1,000,000.002.550000SGD-2,550,000.00J2a
FRX100125-Mar-03BFX Cash Clearing AccountGBP1,000,000.002.550000SGD2,550,000.00J2b

Note J2a:           The exchange rate on trade date is 2.550000 (Contract rate).

J3                  Month end revaluation

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX100131-Mar-03BFRX : Deal PayablesGBP0.000.000000SGD42,250.00J3a
FRX100131-Mar-03PFX - Unrealised Gains - FX TradeGBP0.000.000000SGD-42,250.00J3b

Note J3b:           The FX revaluation Profit/Loss is analysed as follows:

Trade ID Market RateContract RateNon Base Amt
Profit/(Losses)
FRX10012.5077502.550000-1,000,000.00
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

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX10011-Apr-03PFX - Unrealised Gains - FX TradeGBP0.000.000000SGD42,250.00J4a
FRX10011-Apr-03BFRX : Deal PayablesGBP0.000.000000SGD-42,250.00J4b

J5                  Settlement of Trade

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX10013-Apr-03BCash at BankSGD2,550,000.001.000000SGD2,550,000.00J5a
FRX10013-Apr-03BFRX : Deal ReceiveablesSGD-2,550,000.001.000000SGD-2,550,000.00J5b

J6                  Settlement of Trade

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX10013-Apr-03BCash at BankGBP-1,000,000.002.502920SGD-2,502,920.00J6a
FRX10013-Apr-03BFRX : Deals PayablesGBP1,000,000.002.550000SGD2,550,000.00J6b
FRX10013-Apr-03PFX - Realised Gains - FX TradeGBP0.000.000000SGD-47,080.00J6c

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 RateContract RateNon Base Amt
Profit/(Losses)
FRX10012.5029202.550000-1,000,000.00
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)

TradeIDPostDateB/PAccountCcyCcy AmountExc RateCcyBase AmountLine
FRX100131-Mar-03BFRX : Derivative Liability Fair ValueSGD41,985.000.000000SGD41,985.00J7a
FRX100131-Mar-03PFX - Unrealised Gains - FX TradeSGD-41,985.000.000000SGD-41,985.00J7b

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

DateUSD/SGD
31-Mar-032.507750
3-Apr-032.502920

*Rates used for calculation are in full precision. Illustrated rates are rounded to 6dp.

FREQUENTLY ASKED QUESTIONS

RELATED INFORMATION

Update FX MTM

CHANGE HISTORY

DateByChanges
28-Jul-2008CSCreation.
18-Oct-2016CasReformatted.
22-May-2017TSAdded journals for manual updating of FX MTM.
24-Apr-2020LTRe-formatting.
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