Forex revaluation table in sap
Any FC Balance in any summary account is translated into Functional currency balance to report on balance sheet tp other reports.
Description
When clearing open items in a foreign currency, exchange rate differences may occur due to fluctuations in exchange rates. The system posts these exchange rate differences automatically as realized gains or losses. The realized difference is stored in the cleared line item. Exchange rate differences are also posted when open items are valuated for the financial statements.
These exchange rate differences from valuation are posted to another exchange rate difference account and to a financial statement adjustment account. When clearing an open item that has already been valuated, the system reverses the balance sheet correction account and posts the remaining exchange rate difference to the account for realized exchange rate differences.
Enter Exchange Rates OB If you manage parallel currencies, generally all balance sheet accounts are to be valuated, not only accounts that are managed in foreign currency or that have open items in foreign currency. In a valuation run, different currency types can be processed in parallel. Since the valuation methods for the currency types can be different, the parameters for the valuation programs have been extended.
You can specify a valuation method for Local currency, group currency, hard currency, index-based currency and global company currency respectively. A valuation is carried out exactly for those currency types for which a valuation method is predefined. You can enter the amounts in local currency or in the currencies managed in parallel on the entry screens for the document entry.
All amount fields not entered receive a zero value. An automatic translation of amounts does not occur. Foreign Currency Transactions:.
271370685-SAP-Foreign-Currency-Revaluation-Q-A.docx
This exchange rate type must be contained in the system. Create additional exchange rate types if necessary. Then maintain the spreads under the activity Maintain spreads. Note: The reversed rate is used only if you have not made an entry for the corresponding exchange rate in the activity Enter exchange rates. This indicator must be set for the exchange rate type that is used for currency translation within the EMU. Exchange rate difference can be defined as the amount arising where a foreign currency amount is translated at different exchange rates.
Here, we can define for each company code, a maximum difference between exchange rates for postings in foreign currency.
Revaluation Definition
If an exchange rate or the local and the foreign currency amount were entered manually during document entry, then a comparison is made with the exchange rates stored in the system. If any deviation occurs and it exceeds the percentage rate specified here, then a warning appears. Check Exchange rate types:. Define Translation Ratios for Currency Translation:. Enter Exchange Rates :. This is called Forex table. We can enter Foreign Exchange rates Daily, Weekly, Monthly, for each type we can enter only one rate in a day. The system uses the type M exchange rates for foreign currency translation when posting and clearing documents in the activity Enter Exchange Rate.
An entry must exist in the system for this exchange rate type. The exchange rates apply to all company codes. Foreign Currency postings for End User area:. When exchange rate is not entered at the time of posting the Document:. When exchange rate is entered at the time of posting the Document:. Jayanth Maydipalle. You carry out accounting for a company code in the country currency local currency of the company code.
Therefore, you must specify the local currency in the system for each company code. All other currencies used are indicated as foreign from the point of view of the company code. There are several situations in which you need foreign currencies:. Sometimes circumstances arise in which you have to define new currency. I would consider it unrealized. It is only realized on conversion of the bank balance to local currency.
Gerry Rodrigues: We are about to add two additional local currencies to each company code and have the following questions: 1 Is it mandatory that you have depreciation areas for each additional local currency? If so, when the asset reconciliation accounts are translated at month end in ECC, will they not be out of balance with the asset subledger depreciation areas for the additional local currencies? SAP notes , , and apply only when you have one ledger.
Do other customers have this requirement to post the FX reval adjustment back to the original open item account?
If so, what solutions are possible? Rohana Gunawardena: Gerry, thank you for your questions. Do refer to my response to the first question which talked about the special conversion tools required to activate additional local currencies post golive. During the currency activations I have been involved with, there have been no issues with out of balance depreciation areas. Again, generating the depreciation areas requires custom tools as a straight copy will not create asset history. At first, posting back to the open item account sounds like a good idea, but if you think through the details, it will be a problem for end users, e.
They will need to post entries per customer and will have many adjustment postings which may get printed on customer statements or confuse AR clerks.
When you set up Local Currency 3 e. Hard Currency there is no bucket left in GLt0 and the table cannot be modified. How can we state revaluated balances?
Rohana Gunawardena: Vijay, thanks for the clarification. Now I know what the real question is. The option you mention is called Delta valuation, where only one months delta is posted on each valuation run. Delta valuation is an option in New-GL. SAP recognizes delta postings are a legal requirement in some countries. This configuration is not heavily used and has a lot of notes. I would recommend heavy testing of multiple scenarios prior to go-live.
SAP Foreign Currency Valuation
I have clients who operate in some countries not Chile that at first instance appear to require delta postings; however, after working with their external auditors, they managed to get an exception from the local regulator or foun d a legal workaround so they did not need to activate delta postings. This may be something your users want to look at. Its similar to physical cash, and SAP values should be same as bank balances. Is there a better way? Rohana Gunawardena: This additional detail makes things clearer.
However, this loads one bank account at a time and will not cross-ref transactions across different accounts. To really see what is a workable solution for you, I will need to see the step by step process you follow and the exact issue the auditors have. Harish Menta: Hi Rohana, I have a few questions.
Do these conversions happen only if you have config. If not, what. Could you please explain the behavior of the system? Rohana Gunawardena: Harish, thanks for your question. See SAP Note for more details. As mentioned in an earlier reply, Group Currency, Hard Currency, etc. If you do not have them in OB22, they cannot simply be added.
Rohana Gunawardena: Whichever option you choose, 1 or 2, there will be scenarios where the outcome is not what is expected. You need to choose what is right for your business, which may not necessarily be standard best practice. I would recommend working with your accounting department running through key business transactions with setting 1 and setting 2 in a.
Make sure you get end user sign-off on your decision. If so, what are some of the lessons you learned from the project? Rohana Gunawardena: Great question. This is a scenario many companies find themselves in, e. See my comment to Lauren, above, with more details on that scenario. Al Susinskas: When defining multiple local currencies for a company code, how should the "source currency" setting be typically set for the additional local currencies? SAP best practice is setting 2, Translation from first local currency, the reason being the companys local legal books are based on local currency balances in most cases.
The note has some good examples. When they invoice sales and receipt cash in their own local currency, SAP does not correctly reflect a realized currency gain or loss on the transactions. With these subsidiaries not being branches of the parent company, how come SAP. Rohana Gunawardena: Henri, this is an interesting scenario. Reading your question, I agree that this is unusual behavior. My first inclination would be to check the configuration, but I assume you have done this already.
This is an issue that will take some investigation. It is unlikely I can solve it on the forum. Send me an e-mail and we can set up a time to go through this in detail.