Hi all,
It has always been my belief that contracts with customers denominated in non-functional currencies have revenue amount that are fixed at the current rate when the agreement is signed. Invoices are issued at the same rate that the contract was signed at (ensuring that final revenue and invoicing will match the original contract value). AR, Unbilled, and Deferred revenue are remeasured quarterly with the difference being recorded to unrealized G/L. As cash is received, the unrealized amounts will be reversed and the realized G/L will be recorded as the difference between the historical contract rate the cash received. However, I am going through a ERP implementation and the process our implementation partners have described directly contradicts my current understanding. I have tried researching and have not found what I consider to be concrete examples one way or the other and would greatly appreciate any input.
Thanks,
Ben
It has always been my belief that contracts with customers denominated in non-functional currencies have revenue amount that are fixed at the current rate when the agreement is signed. Invoices are issued at the same rate that the contract was signed at (ensuring that final revenue and invoicing will match the original contract value). AR, Unbilled, and Deferred revenue are remeasured quarterly with the difference being recorded to unrealized G/L. As cash is received, the unrealized amounts will be reversed and the realized G/L will be recorded as the difference between the historical contract rate the cash received. However, I am going through a ERP implementation and the process our implementation partners have described directly contradicts my current understanding. I have tried researching and have not found what I consider to be concrete examples one way or the other and would greatly appreciate any input.
Thanks,
Ben