For example, if a company based in the US (using US Dollars as their functional currency):

At the end of March, these foreign currency transactions would be considered "unsettled amounts" because while they have been recorded, the company has not yet paid the €10,000 liability or received the CAD 15,000 receivable.To ensure the financial statements are up-to-date and accurately reflect any exchange rate fluctuations, these unsettled amounts need to be "revalued" at the end of each accounting period using the current exchange rates.

So using the above example, if at March 31 the exchange rates were:
1 Euro = $1.08 USD
1 CAD = $0.75 USD

The company would make the following revaluation entries:

This revaluation adjusts the unsettled amounts to the newer exchange rates. When the payable and receivable are ultimately settled in April, any further exchange differences would be recorded as a gain or loss.The key point is that revaluing the unsettled foreign currency amounts each period ensures the accounting records and financial statements properly reflect the up-to-date converted amount in the company's functional currency. Eleven will help to automate the creation of the Unrealised Gain and Loss Entry. Please refer to (link to the UnGL Entry page).