PURPOSE
To show illustration of foreign exchange outright cross 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 |
USD |
| USD 1,453,000.00 |
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 | 31-Mar-03 | Month end revaluation |
| J5 | 1-Apr-03 | Reversal of Month end revaluation |
| J6 | 1-Apr-03 | Reversal of Month end revaluation |
| J7 | 3-Apr-03 | Settlement of Trade |
| J8 | 3-Apr-03 | Settlement of Trade |
| J9 | 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 | USD | 1,435,000.00 | 1.749090 | SGD | 2,509,940.00 | J1a |
| FRX1001 | 25-Mar-03 | B | FX Cash Clearing Account | USD | -1,435,000.00 | 1.749090 | SGD | -2,509,940.00 | 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 | 2.509940 | SGD | -2,509,940.00 | J2a |
| FRX1001 | 25-Mar-03 | B | FX Cash Clearing Account | GBP | 1,000,000.00 | 2.509940 | SGD | 2,509,940.00 | J2b |
J3 Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 31-Mar-03 | B | FRX: Deals Receivables | USD | 0.00 | 0.000000 | SGD | -24,811.15 | J3a |
| FRX1001 | 31-Mar-03 | P | FX - Unrealised Losses - FX Trade | USD | 0.00 | 0.000000 | SGD | 24,811.15 | J3b |
J4 Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 31-Mar-03 | B | FRX: Deals Payables | GBP | 0.00 | 0.000000 | SGD | 2,190.00 | J4a |
| FRX1001 | 31-Mar-03 | P | FX - Unrealised Gains - FX Trade | GBP | 0.00 | 0.000000 | SGD | -2,190.00 | J4b |
Month End Revaluation
| Trade ID | Ccy | Book Rate | Rate on M/E | Amount | Profit/(Losses) |
| FRX1001 | USD | 1.749090 | 1.731800 | 1,435,000.00 | -24,811.15 |
| FRX1001 | GBP | 2.509940 | 2.507750 | -1,000,000.00 | -2,190.00 |
| Net P/L | -22,621.15 |
MTM can also be updated manually in the system for a FX trade. If the MTM is manually updated, please see J9 for the journals generated.
J5 Reversal of Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 1-Apr-03 | B | FRX: Deals Receivables | USD | 0.00 | 0.000000 | SGD | 24,811.15 | J5a |
| FRX1001 | 1-Apr-03 | P | FX - Unrealised Losses - FX Trade | USD | 0.00 | 0.000000 | SGD | -24,811.15 | J5b |
J6 Reversal of Month end revaluation
| TradeID | PostDate | B/P | Account | Ccy | Ccy Amount | Exc Rate | Ccy | Base Amount | Line |
|---|---|---|---|---|---|---|---|---|---|
| FRX1001 | 1-Apr-03 | B | FRX: Deals Receivables | GBP | 0.00 | 0.000000 | SGD | -2,190.00 | J6a |
| FRX1001 | 1-Apr-03 | P | FX - Unrealised Gains - FX Trade | GBP | 0.00 | 0.000000 | SGD | 2,190.00 | J6b |
J7 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 | USD | 1,435,000.00 | 1.719940 | SGD | 2,468,113.90 | J7a |
| FRX1001 | 3-Apr-03 | B | FRX: Deals Receivables | USD | -1,435,000.00 | 1.749090 | SGD | -2,509,944.15 | J7b |
| FRX1001 | 3-Apr-03 | P | FX - Unrealised Losses - FX Trade | USD | 0.00 | 1.000000 | SGD | 41,830.25 | J7c |
J8 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 | J8a |
| FRX1001 | 3-Apr-03 | B | FRX: Deals Payables | GBP | 1,000,000.00 | 2.509940 | SGD | 2,509,940.00 | J8b |
| FRX1001 | 3-Apr-03 | P | FX - Unrealised Gains - FX Trade | GBP | 0.00 | 1.000000 | SGD | -7,020.00 | J8c |
Month End Revaluation
| Trade ID | Ccy | Book Rate | Rate on M/E | Amount | Profit/(Losses) |
| FRX1002 | USD | 1.749090 | 1.719940 | 1,435,000.00 | -41,830.25 |
| FRX1002 | GBP | 2.509940 | 2.502920 | -1,000,000.00 | 7,020.00 |
| Net P/L | -34,810.25 |
J9 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 | -21,985.00 | 0.000000 | SGD | -21,985.00 | J9a |
| FRX1001 | 31-Mar-03 | P | FX - Unrealised Losses - FX Trade | SGD | 21,985.00 | 0.000000 | SGD | 21,985.00 | J9b |
Note J9b: 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 to SGD | GBP to SGD |
| 25-Mar-03 | 1.749090 | 2.509940 |
| 31-Mar-03 | 1.731800 | 2.507750 |
| 3-Apr-03 | 1.719940 | 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. |
0 Comments