Foreign Exchange Rollover

PURPOSE

To show illustration of foreign exchange rollover.

OVERVIEW

In a FX rollover, CS Lucas automatically create a new FX Transaction that cancel off with the original FX trade and a new FX Transaction for the forward settlement. The settlement is cleared through a “clearing account”.

SUMMARY OF JOURNALS

IDDescription
Case 1Historical Rate Rollover (Full)
Case 2Historical Rate Rollover (Partial)
Case 3Current Rate Rollover (Full)
Case 4Historical Rate Roll Back (Full)
Case 5Current Rate Roll Back (Full)

The accounting is deal with as illustrated below.

JOURNAL DETAILS

Case 1           Historical Rate Rollover (Full)

                                Original FX

                                                                                                                                                                                                                                                                      Clearing Cash Account                             

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX101USD
1,000.00
SGD
-1,700.00
1.700000
1,000.00
-1,700.00

                              Rollover as historical rate to 20-Feb-02

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX105USD
-1,000.00
SGD
1,700.00
1.700000
-1,000.00
1,700.00
20-Feb-02FRX106USD
1,000.00
SGD
-1,700.00
1.710000
Net
0.00
0.00

           Note:              FRX105 and FRX106 are automatically booked by the system.

           The accounting entry for FRX105 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)USD-1,000.001.712300SGD-1,712.30
FRX10515-Feb-02BFX Cash Clearing AccountUSD1,000.001.712300SGD1,712.30
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)SGD1,700.001.000000SGD1,700.00
FRX10515-Feb-02BFX Cash Clearing AccountSGD-1,700.001.000000SGD-1,700.00

           The accounting entry for FRX106 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankUSD1,000.001.721000SGD1,721.00
FRX10620-Feb-02BFX Cash Clearing AccountUSD-1,000.001.721000SGD-1,721.00
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankSGD-1,710.001.000000SGD-1,710.00
FRX10620-Feb-02BFX Cash Clearing AccountSGD1,710.001.000000SGD1,710.00

+ Exchange rates used on the journals above are spot exchange rates on value dates. See Exchange Rates below.

Case 2           Historical Rate Rollover (Partial)

                                Original FX

                                                                                                                                                                                                                                                                      Clearing Cash Account              

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX101USD
1,000.00
SGD
-1,700.00
1.700000
1,000.00
-1,700.00

                              Rollover as historical rate to 20-Feb-02

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX105USD
-700.00
SGD
1,190.00
1.700000
-700.00
1,190.00
20-Feb-02FRX106USD
700.00
SGD
-1,197.00
1.710000

                              Residual Settlement on 15-Feb-02

VDateTradeIDCcy
USD
SGD
15-Feb-02CDL201USDInflow USD 300.
-300.00
15-Feb-02CDL202SGDOutflow SGD 510.
510.00
Net
0.00
0.00

           Note:              FRX105, FRX106, CDL201 and CDL202 are automatically booked by the system.

           The accounting entry for FRX105 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)USD-700.001.712300SGD-1,198.61
FRX10515-Feb-02BFX Cash Clearing AccountUSD700.001.712300SGD1,198.61
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)SGD1,190.001.000000SGD1,190.00
FRX10515-Feb-02BFX Cash Clearing AccountSGD-1,190.001.000000SGD-1,190.00

           The accounting entry for FRX106 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankUSD700.001.721000SGD1,204.70
FRX10620-Feb-02BFX Cash Clearing AccountUSD-700.001.721000SGD-1,204.70
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankSGD-1,197.001.000000SGD-1,197.00
FRX10620-Feb-02BFX Cash Clearing AccountSGD1,197.001.000000SGD1,197.00

           The accounting entry for CDL201 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
CDL20115-Feb-02BCash at BankUSD300.001.712300SGD513.69
CDL20115-Feb-02BCash at Bank (Clearing A/C)USD-300.001.712300SGD-513.69

           The accounting entry for CDL202 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
CDL20215-Feb-02BCash at Bank (Clearing A/C)SGD510.001.000000SGD510.00
CDL20215-Feb-02BCash at BankSGD-510.001.000000SGD-510.00

+ Exchange rates used on the journals above are spot exchange rates on value dates. See Exchange Rates below.

Case 3           Current Rate Rollover (Full)

                                Original FX

                                                                                                                                                                                                                                                                      Clearing Cash Account              

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX101USD
1,000.00
SGD
-1,700.00
1.700000
1,000.00
-1,700.00

                              Rollover as current rate to 20-Feb-02

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX105USD
-1,000.00
SGD
1,705.00
1.705000
-1,000.00
1,705.00
20-Feb-02FRX106USD
1,000.00
SGD
-1,710.00
1.710000

                              Net Settlement on 15-Feb-02

VDateTradeIDCcy
USD
SGD
15-Feb-02CDL201SGDInflow SGD 5.00
-5.00
Net
0.00
0.00

          Note:              FRX105, FRX106 and CDL201 are automatically booked by the system.

           The accounting entry for FRX105 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)USD-1,000.001.712300SGD-1,712.30
FRX10515-Feb-02BFX Cash Clearing AccountUSD1,000.001.712300SGD1,712.30
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)SGD1,705.001.000000SGD1,705.00
FRX10515-Feb-02BFX Cash Clearing AccountSGD-1,705.001.000000SGD-1,705.00

           The accounting entry for FRX106 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankUSD1,000.001.721000SGD1,721.00
FRX10620-Feb-02BFX Cash Clearing AccountUSD-1,000.001.721000SGD-1,721.00
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10620-Feb-02BCash at BankSGD-1,710.001.000000SGD-1,710.00
FRX10620-Feb-02BFX Cash Clearing AccountSGD1,710.001.000000SGD1,710.00

           The accounting entry for CDL201 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
CDL20115-Feb-02BCash at BankSGD5.001.000000SGD5.00
CDL20115-Feb-02BCash at Bank (Clearing A/C)SGD-5.001.000000SGD-5.00

+ Exchange rates used on the journals above are spot exchange rates on value dates. See Exchange Rates below.

Case 4           Hisotrical Rate Roll Back (Full)

                                Original FX

                                                                                                                                                                                                                                                                      Clearing Cash Account              

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX101USD
1,000.00
SGD
-1,700.00
1.700000
1,000.00
-1,700.00

                              Rollback as historical rate to 12-Feb-02

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX105USD
-1,000.00
SGD
1,700.00
1.700000
-1,000.00
1,700.00
12-Feb-02FRX106USD
1,000.00
SGD
-1,710.00
1.710000
Net
0.00
0.00

           Note:              FRX105 and FRX106 are automatically booked by the system.

           The accounting entry for FRX105 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)USD-1,000.001.712300SGD-1,712.30
FRX10515-Feb-02BFX Cash Clearing AccountUSD1,000.001.712300SGD1,712.30
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)SGD1,700.001.000000SGD1,700.00
FRX10515-Feb-02BFX Cash Clearing AccountSGD-1,700.001.000000SGD-1,700.00

           The accounting entry for FRX106 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10612-Feb-02BCash at BankUSD1,000.001.712200SGD1,712.20
FRX10612-Feb-02BFX Cash Clearing AccountUSD-1,000.001.712200SGD-1,712.20
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10612-Feb-02BCash at BankSGD-1,710.001.000000SGD-1,710.00
FRX10612-Feb-02BFX Cash Clearing AccountSGD1,710.001.000000SGD1,710.00

+ Exchange rates used on the journals above are spot exchange rates on value dates. See Exchange Rates below.

Case 5           Current Rate Roll Back (Full)

                                Original FX

                                                                                                                                                                                                                                                                      Clearing Cash Account              

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX101USD
1,000.00
SGD
-1,700.00
1.700000
1,000.00
-1,700.00

                              Rollback as current rate to 12-Feb-02

VDateTradeIDCcy
Buy/(Sell)
Amount
Ccy
Buy/(Sell)
Amount
Rate
USD
SGD
15-Feb-02FRX105USD
-1,000.00
SGD
1,705.00
1.705000
-1,000.00
1,705.00
12-Feb-02FRX106USD
1,000.00
SGD
-1,710.00
1.710000

                              Net Settlement on 15-Feb-02

VDateTradeIDCcy
USD
SGD
15-Feb-02CDL201SGDInflow SGD 5.00
-5.00
Net
0.00
0.00

           Note:              FRX105, FRX106 and CDL201 are automatically booked by the system.

           The accounting entry for FRX105 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)USD-1,000.001.712300SGD-1,712.30
FRX10515-Feb-02BFX Cash Clearing AccountUSD1,000.001.712300SGD1,712.30
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10515-Feb-02BCash at Bank (Clearing A/C)SGD1,705.001.000000SGD1,705.00
FRX10515-Feb-02BFX Cash Clearing AccountSGD-1,705.001.000000SGD-1,705.00

           The accounting entry for FRX106 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10612-Feb-02BCash at BankUSD1,000.001.712200SGD1,712.20
FRX10612-Feb-02BFX Cash Clearing AccountUSD-1,000.001.712200SGD-1,712.20
TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
FRX10612-Feb-02BCash at BankSGD-1,710.001.000000SGD-1,710.00
FRX10612-Feb-02BFX Cash Clearing AccountSGD1,710.001.000000SGD1,710.00

           The accounting entry for CDL201 will be as follows:

TradeIDPostDateB/PAccountCcyCcy Amt D/(CR)Rate+BaseBase Amt D/(CR)
CDL20115-Feb-02BCash at BankSGD5.001.000000SGD5.00
CDL20115-Feb-02BCash at Bank (Clearing A/C)SGD-5.001.000000SGD-5.00

+ Exchange rates used on the journals above are spot exchange rates on value dates. See Exchange Rates below.

EXCHANGE RATES

The following rates were used for this illustration.

Spot Rate

SGD1.000000
DateUSD/SGD
12-Feb-021.712200
15-Feb-021.712300
20-Feb-021.721000

RELATED INFORMATION

FREQUENTLY ASKED QUESTIONS

CHANGE HISTORY

DateByChanges
28-Jul-2008CSCreation.
23-Jun-2016RJReformatted.
5-May-2020LTRe-formatting.
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