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Global AccountingGeneral AccountingUpdated: Sep 13, 2026
General Guidance: The principles described for Global Accounting are broadly applicable but should be verified against your specific local tax laws.
Direct Answer
Record the foreign transaction at the spot exchange rate on the date it occurred. At month-end or year-end, revalue the foreign bank account balance using the closing exchange rate. The difference is booked as an Unrealized Forex Gain/Loss.
The Mechanics of Revaluation
If you hold $10,000 USD in a bank account, its value in your home currency fluctuates daily.
- Base Currency Accounting: Your ledger must be maintained in your home currency.
- Closing Rate: On Dec 31st, multiply $10,000 by the official central bank exchange rate.
- Unrealized Gain: If the new value is higher than the book value, credit
Unrealized Forex Gain. Because it is unrealized, it is usually excluded from corporate tax computations.