Exchange Rate Variance for an Expense Item

Dear All,

We all know Payables use PO Rate Variance Gain/Loss Accounts to record the Exchange Rate Variance Gains/Losses for your Inventory Items.

These accounts are not used to record variances for your Expense Items. Any Exchange Rate Variance for your Expense Items is recorded to the Charge Account of the Purchase Order.

My query is why ERV for Expense Item is recorded to Charge Account. What is its significance. I want to understand the concept.

Thanks & Regards

Chandan