---
title: "FX gain and loss"
description: "FX gain and loss meaning: the effect of exchange-rate moves between recording and settling a foreign-currency transaction. Realised vs unrealised, explained."
url: https://1flux.ai/glossary/fx-gain-and-loss
last_updated: 2026-10-11
---

[Accounting](https://1flux.ai/glossary#accounting)

# FX gain and loss

FX gain and loss meaning: what happens to your books when the exchange rate moves before a customer pays.

Glossary Updated 11 October 2026

Definition

An FX (foreign exchange) gain or loss is the difference caused by exchange-rate movements between the date a foreign-currency transaction is recorded and the date it is settled or revalued.

## FX gain and loss meaning: realised vs unrealised

If you invoice a customer in euros and the rate moves before they pay, you receive a different amount in your own currency. The difference on settlement is a realised gain or loss. An unrealised gain or loss arises when open balances are revalued at period-end before they’re settled.

A realised FX loss

Example

- Invoice: EUR 10,000 at 4.00

  AED 40,000

- Payment: EUR 10,000 at 3.95

  AED 39,500

Realised FX loss

AED 500

The exchange rates in this example are illustrative.

Because the AED and SAR are pegged to the US dollar, the largest swings for UAE and Saudi traders usually come from other currencies, such as the euro or the rupee. Each company measures FX against its [functional currency](https://1flux.ai/glossary/functional-currency).

In 1flux

1flux posts realised FX gains and losses automatically on customer payments and purchase invoices, using exchange rates you enter, up to 8 decimals. A missing rate stops posting with a clear instruction rather than a guess. [See Arabic-ready data and multi-currency](https://1flux.ai/platform/arabic-and-multi-currency)

Related

## Keep exploring

### [Functional currency](https://1flux.ai/glossary/functional-currency)

The currency a company's books are kept in.

### [Currency translation difference](https://1flux.ai/glossary/currency-translation-difference)

The balancing amount from translating a subsidiary's books at different rates.

### [Accounts receivable](https://1flux.ai/glossary/accounts-receivable)

Money customers owe you for goods or services invoiced on credit.

### [Multi-currency and Arabic](https://1flux.ai/platform/arabic-and-multi-currency)

Any currency per document, three-decimal rounding, realised FX, and Arabic names, search and quotations.

Last updated 11 October 2026