FX and currency examples

Unless stated otherwise, these foreign exchange (FX) and currency examples assume that revenue recognition takes place on a per-day basis.

Multi-currency

This example uses the following assumptions:

• On 1 January, at 00:00:00 UTC, an invoice finalises and the customer immediately pays 30 EUR.
• Your account’s settlement currency is USD.
• The EUR to GBP exchange rate is 1.20 at the time of finalisation and payment.

In this example, you receive 36 USD. Because the invoice finalises and is paid immediately, you have no exposure to fluctuating exchange rates and therefore no foreign exchange (FX) gains or losses.

FX loss

This example uses the following assumptions:

• On 1 January, at 00:00:00 UTC, an invoice finalises for 30 EUR.
• On 1 February, at 00:00:00 UTC, the customer pays the invoice for 30 EUR.
• Your account’s settlement currency is USD.
• The EUR to GBP exchange rate is 1.20 at the time of finalisation.
• The EUR to GBP exchange rate is 1.10 at the time of payment.

In this example, the exchange rate changed between invoice finalisation and payment, so you receive 33 GBP instead of 36.

FX loss from a refund or dispute

This example uses the following assumptions:

• On 1 January, at 00:00:00 UTC, an invoice finalises for 30 EUR.
• On 1 February, at 00:00:00 UTC, the customer pays the invoice for 30 EUR.
• On 1 March, at 00:00:00 UTC, a refund is issued for 30 EUR.
• Your account’s settlement currency is USD.
• The EUR to GBP exchange rate is 1.20 at the time of finalisation.
• The EUR to USD exchange rate is 1.20 at the time of payment.
• The EUR to USD exchange rate is 1.30 at the time of refund.

In this example, the exchange rate changed between invoice payment and refund, so you receive 36 USD but you later refund 39 USD. Therefore, you incur 3 USD for FxLoss.

A dispute works in the same way as a refund, except that it books the disputes account instead of the refunds account.

Multiple settlement currencies

This example uses the following assumptions:

• Your account settles in GBP by default but EUR is also a supported settlement currency.
• On 1 January, at 00:00:00 UTC, two invoices finalise for separate customers. One is for 30 EUR, and the other is for 400 NOK.
• The NOK to GBP conversion rate is 0.10 at the time of finalisation and payment.
• Both invoices are paid immediately.

In this example, you receive 40 GBP from the NOK transaction and 30 EUR from the EUR transaction. Because EUR is a supported settlement currency, no exchange rate is applied.