International transactions > Tracking currency gains and losses
Whenever you have a foreign bank account, changes in the currency exchange rates between that country and your home country can cause the value of your foreign currency to fluctuate. When your local currency weakens relative to the foreign currency, the value of your foreign account increases, creating a currency gain. When your local currency strengthens, your foreign account experiences a loss in real value. Your accounting software can track these fluctuations.Gains or losses in the value of a foreign account are considered unrealized while the money is still sitting in the foreign account. When the money is withdrawn from the account, either by using it to pay for a purchase or by converting it to local currency, the gain or loss is considered realized.