Unrealised Differences (SAP Business One)

Unrealised differences are currency differences arising from the revaluation of open foreign currency items as at the reporting date. They result from the difference between the original booking or document rate (historical rate) and the current closing rate. As long as these items are not realised through actual payments or other transactions, these differences are considered unrealised.

E-invoicing in Germany: How to implement the obligation with SAP Business One

Origin and purpose:
At the end of each period or at the annual accounts open foreign currency balances - such as receivables, liabilities, bank accounts and other non-financial accounts - must be revalued, as the exchange rates may have changed since the time of the original entry. The resulting unrealised differences show how the value of the foreign currency items has changed without actually having been realised.

Differentiation from realised differences:

Realised differences arise from actual payment processes or transactions (e.g. incoming or outgoing payments). They are automatically posted in SAP Business One.
Unrealised differences only arise as a result of revaluations on the balance sheet date and only become realised differences later, when payments are actually received or made.

Handling in SAP Business One:
The function is available for determining and posting unrealised differences:

Finance → Period-end closing → Exchange rate differences

After execution, the system automatically creates proposals for the necessary difference postings, which can be checked and accepted or rejected by the user.

Versino Financial Suite

the Versino Financial Suite complements SAP Business One with automations, improved evaluations and clear dashboards, making the revaluation and analysis of unrealised differences more efficient, transparent and controllable.

Related term - translation differences:
In addition, SAP Business One also contains Translation differenceswhich are relevant when the system currency differs from the local currency. They relate to the adjustment of balances between the system currency and the local currency and are treated separately from unrealised currency differences.

Example:
A company recognises an outstanding liability of USD 5,000 on the balance sheet date, originally booked at EUR 1 = USD 1.20 (EUR 4,167). The exchange rate on the reporting date is EUR 1 = USD 1.10, which increases the liability to EUR 4,545. The difference of EUR +378 represents an unrealised exchange rate loss and is recognised via the "Exchange rate differences" function.