Gains and Losses and Your Accounting Company Settings

When you configure Vision, you specify the default general ledger accounts to which you want to post realized and unrealized gains and losses.

Vision calculates and posts gains and losses to these accounts in the following cases:

• When you process payments or post cash receipts for foreign currency accounts payable or accounts receivable transactions, Vision uses the realized gains and losses accounts.
• When you run the Gains/Losses and Revaluations process to calculate gains and losses for unpaid foreign currency accounts payable and accounts receivable transactions and for foreign-denominated accounts, Vision uses the unrealized gains and losses accounts.
• To accommodate different accounting standards, Vision gives you the option to select either balance sheet accounts or income statement accounts for your gains and losses accounts. For example, if your standards require that net income include both unrealized gains and unrealized losses, you can specify income and expense accounts for unrealized gains and losses. If your standards permit unrealized losses to affect net income and unrealized gains to remain on the balance sheet (to reduce corporate tax liability, for example), you can specify an expense account for unrealized losses and a balance sheet account for unrealized gains.

You can also specify a different account for each of the four types of gains and losses accounts, or you can assign the same account to two or more of them. For example, you can post both unrealized gains and unrealized losses to the same general ledger account.

Most companies post gains and losses to the following types of Vision accounts:

• Realized gains: Other revenue (Other Charges account type)
• Realized losses: Other expense or indirect expense (Other Charges or Indirect account type)
• Unrealized gains: Other revenue or asset (Other Charges or Asset account type)
• Unrealized losses: Other expense, indirect expense, or liability (Other Charges, Indirect, or Liability account type)

Most companies that select balance sheet accounts for gains and losses use the accounts receivable account or accounts payable account. However, you can also set up separate balance sheet accounts to track gains and losses.

When you select a gains or losses account, you specify the work breakdown structure (project, phase, and task, for example) to which the gains or losses entries for that account are posted. If you are using organizations in Vision, the work breakdown structure for an account also determines which organization’s financial statement is affected by gains or losses entries for that account. The exception is if you are using organizations and Maintain separate balance sheets by Organization is selected in the Organization General Setup form. In that case, Vision uses the work breakdown structure specified in the Individual Organization Setup form for the organization.