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Under normal circumstances when supplier invoice was received following which payment would then be made, the gain and loss would
Reason being 1) The exchange rate for the invoice is not available yet at the point of making the advance payment
Refer to the screen shot below, assuming you made a payment (in advance) to your supplier on 13th Sep 2011 and invoice was received only on
This is especially important to take note if you are reporting monthly financial results to your management.
Notice that the actual gain and loss is calculated and presented in the month of Oct 2011(whichever the later date, compared with payment date).
*Take note also that once invoice is received, immediately go to the payment and offset in the same month as the supplier invoice.