Balance Sheet Date before Date of Payment

The question arises as to what adjustments should be made if a balance sheet date falls between the date of sale (or purchase) and the date of collection (or payment). For example, assume that Amerco shipped goods to its German customer on December 1, 2017, with payment to be received on March 1, 2018. Assume that at December 1, the spot rate for the euro was $1.32, but by December 31, the euro has appreciated to $1.33. Is any adjustment needed at December 31, 2017, when the books are closed to account for the fact that the foreign currency receivable has changed in U.S. dollar value since December 1?

Authoritative accounting literature requires foreign currency balances such as a foreign currency receivable or a foreign currency payable to be revalued at the balance sheet date to account for the change in exchange rates. Under the two-transaction perspective, this means that a foreign exchange gain or loss arises at the balance sheet date. The next question then is what should be done with these foreign exchange gains and losses that have not yet been realized in cash. Should they be included in net income?