An FX gain/loss is the change in the value of foreign exchange-denominated transaction as reflected in the income statement. A sales transaction creates an FX gain (loss) when the foreign currency appreciates (depreciates) against the home currency of the company. If this position is hedged with a financial instrument like a currency forward contract, this contract will create offsetting FX losses and gains. An FX gain/loss is said to be unrealised when it is reflected in financial statements while the transaction has not yet been settled. When the transaction is settled, the FX gain/loss is realised.