An exchange gain or loss that arises prior to settlement (i.e. that is unrealized)is recognized in the statement of re-measurement gains and losses.

Question

Quizplus · Accepted Answer

An unrealized exchange gain or loss is recognized in the statement of re-measurement gains and losses as it has not yet been settled. Unrealized gains or losses are shown in the financial records until the settlement takes place. Once the settlement occurs, the gain or loss becomes realized and is reported in the income statement. Therefore, the statement in the question is true.

An Exchange Gain or Loss That Arises Prior to Settlement