Recognized Gain/Loss

Under this accounting method, exchange gains and losses are recognized when documents are revalued using the exchange rate in effect at the revaluation date (usually the balance sheet date), or when they are settled.  

All exchange gains and losses are considered permanent, whether they arise during revaluation or upon settlement, and they are not reversed in the next period. They are posted to exchange gain and exchange loss accounts, and are included in income (they display on the income statement, and they are subject to tax) for the current period.