How does Class calculate foreign exchange (forex) realised gain?
For each Cash Out event in a foreign bank account, Class calculates realised forex gain/loss.
For accounting purposes, the "first-in, first-out" (FIFO) methodology is applied to the calculation.
In the below example parcel, the exchange rate of the currency is calculated as
$24,342.14 / $18,811.18 = $1.294025.
The forex gain/loss calculation for the $18,809.18 Cash Out event on the 05/07/2018 is:
$18,809.18 * ($1.355381 - $1.294025) = $1,154.056
Subsequently, when the opening balance of USD $18,811.18 is exhausted by multiple withdrawals, based on FIFO, the next parcel is the Cash In event, which, in this example, is $1.343905 on 1 August 2018.
For tax purposes, please refer to user guide Foreign Bank Account Accounting and Tax Treatment