- first, from transaction currency to functional
(usually first local or company code currency - type 10) - so called remeasurement.
Result is posted into P&L
- then, from functional currency to currency of the parent - so called translation. It should be posted directly to equity outside P&L.
2. Translation is the more interesting step.
You should revaluate all accounts except equity;
balance sheet at a rate of period-end,
P&L at an average rate of the period.
Equity (invested capital and retained earnings) should not be revaluated.
In the system, you of course must have a parallel (second local) currency It makes no sense without it.
You will also need several exchange rate types (at least one for BS and one for P&L) and exchange rate difference keys.
There are several options how to solve it (valuation areas, etc.).
Let's try to look at some examples.
In all cases, let's assume original balance in document/CoCd/parallel currency, e.g., 100 EUR = 3000 CZK = 120 USD.
In the next period, the rates change to 33 EUR/CZK and 30 USD/CZK, which should lead to posting of 0 EUR = 300 CZK = -10 USD, of which 300 CZK = +10 USD is valuation on CoCd currency (P&L) and 0 CZK = -20 USD is translation into second local currency (is it theoretically correct approach?)
Case 1:
Balance sheet acct without open items, with balance in forex
(e.g., foreign currency cash or bank account)
The challenge is, that the first level valuation (EUR to CZK) should go to P&L, whereas CZK to USD into BS - the accounts differ.
In the normal config (trans. OBA1, type KDB), you can assign only one pair of accounts to each exchange rate diff. key.
To introduce the other pair, you have to create a valuation area (from currency type 10 to the parallel currency) and then make additional entries in table T030S in transaction SE16 (valuation area is a hidden key field, invisible in OBA1).
In fact, this is the only case where you need the valuation area.
Case 2:
Balance sheet acct without open items, with logical balance only in local currency (e.g., inventory of material).
Values in transaction currency should never be taken into account for any valuation, you should end up with 3000 CZK = 100 USD (20 USD translation loss in step 2).
You need an exch.rate difference key, different from the one used in case 1.
Make sure that the account never gets valuated in company code currency - the "balance only in local currency" chekbox in acct master should be checked (test if it does not impact valuation in second LC - in release 4.x it should not).
Case 3:
P&L accounts
The same as in case 2. You may create a separate exch.rate difference key for them (just to make it easier to create variants of F.05 - they must use a different exch.rate type)
Case 4:
Accounts with open items and reconciliation accounts
The valuation is posted on other (adjustment) accounts, configured in trans. OBA1.
In our case, the posting should look like this:
Step 1: 0 EUR = 300 CZK = +10 USD into P&L
Step 2: 0 EUR = 0 CZK = -20 USD into BS (equity),
for which you have to configure exch.rate differences (OBA1) for each account twice: first for currency type 10, then second local currency.
You should never revaluate the adjustment account as Case 1 or 2, because then all differences would disappear.
The valuation must be reversed on the next day.
Optionally, you can use valuation areas and config table T030HB.
How to do it all practically:
1. Configure exchange rate types for valuation - one for valuation in company code currency (usually M), one for valuation of BS accounts in parallel currency and one for P&L accounts in parallel currency (you may of course need more).
2. Configure exchange rate difference keys for balance sheet accounts without open items (trans. OBA1, type KDB). You will need at least one for accounts in foreign currency (case 1) and one for the rest (case 2, 3).
3. Configure a valuation area for BS accounts in foreign currency (case 1)
4. Create an entry for an exch.rate diff. key for case 1 and valuation area in table T030S using trans. SE16
5. Configure valuation of reconciliation accounts and open item accounts (each of them separately) in OBA1, both for currency type 10 and parallel currency
6. Add exch.rate diff. keys into all GL account masters (non-reconciliation, without open items)
7. Maintain exchange ratios and rates
8. Create variants of F.05 and execute them; always start with valuation in company code currency and with accounts without open item mgmt.
As for the FASB52 tab in F.05 transaction, I did not make it work because of program error (see OSS note 335756).
But, if my reasoning is correct, you do not need it if you run the F.05 in several steps and configure appropriate exch.rate difference accounts.
Try this and let me know your results.
Any remarks and comments (whatever accounting or SAP-related errors you discover or experiences you have) are welcome.
1 comments:
Thank you. Very helpfull article.
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