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Currently XERO record any FX unrealized gain or loss for outstanding foreign currency invoices and bills according to the exchange rate if the day when the invoice or bill is created and then calculate the unrealized gain or loss based on the daily rate movement. When the invoice or bill is paid, the actual gain or loss is then calculated and recorded as FX gain/loss based on the actual base currency amount received. This applies well to foreign currency invoices which are paid to a bank account in base currency.

However, this method should not apply to foreign currency invoices and bills that are paid into or out of a foreign currency bank account as there is no exchange gain/loss at this juncture as the foreign currency was not converted to base currency and the fx exposure is now in the foreign currency bank account. Only when you make a transfer from the foreign currency bank account to the base currency bank account (fx deal to convert the foreign currency to base currency) then the fx gain or loss is realized.