Transaction Currency Changeover: Preparations

Transaction Currency Changeover: Preparations

Prerequisites

Before you can convert Treasury transactions (money market, foreign exchange and derivatives), you need to perform the following activities:

Maintain the euro currency table R/3 Customizing by choosing Treasury Management ® Basic Functions ® Euro Currencies ® Define participating countries for euro changeover.

The table for participating currencies for changing over Treasury transactions is independent of the table of participating currencies used for the local currency changeover. You maintain the table for the local currency changeover in R/3 Customizing by choosing Cross-Application Components ® European Monetary Union: Euro ® Local Currency Changeover ® Central Changeover ® Central Changeover: Preprocessing ® Specify Participating Currencies for Changeover Package

Create one or several number range with internal number assignment for storing the original transactions. In R/3 Customizing, choose Treasury ® Treasury Management ® Money Market/Foreign Exchange/Derivatives ® Transaction Management ® Transaction Types ® Define Number Ranges.
Create the number range 01 for EUR reference links. In R/3 Customizing, choose Treasury ® Treasury Management ® Basic Functions ® Transaction Management ® Define Number Ranges for Linking Transactions.
Create the clearing accounts for taking the amounts in the original currency off the books and posting the amounts in euro (account currency = local currency). There is no open item management. In the application menu, choose Accounting ® Financial accounting ® General ledger ® Master records ® Create.

If you want the system to generate postings, you need to create the following flow types for the money market, foreign exchange and derivatives applications: Postings need to be generated if you want to carry out balance sheet transfers. To do this, create two posting flows (a debit and a credit flow) and two valuation flows. If you only want to carry out one euro valuation, it is sufficient to create the two valuation flows.

Create a flow type (outflow) for taking the amounts in original currency off the books (Flow classification 4, Flow category 40, set as Relevant to posting). In R/3 Customizing, choose Treasury ® Treasury Management ® Money Market/Foreign Exchange/Derivatives ® Transaction Management ® Flow Types ® Define Flow Types.

Create a flow type (inflow) for posting the amounts in euro (Flow classification 4, Flow category 40, set as Relevant to posting). In R/3 Customizing, choose the same path as for creating an outflow.

Create a P&L flow type for a possible loss as a result of the fixed-rate conversion (Flow classification 3, Flow category 90, set as Relevant to posting and Relevant to valuation) In R/3 Customizing, choose the same path as for creating an outflow.

Create a P&L flow type for a possible gain as a result of the fixed-rate conversion (Flow classification 3, Flow category 91, set as Relevant to posting and Relevant to valuation) In R/3 Customizing, choose the same path as for creating an outflow.

Maintain account determination for these flow types. In R/3 Customizing, choose Treasury ® Treasury Management ® Money Market/Foreign Exchange/Derivatives ® Functions ® Accounting ® Account Determination ® Define Settings

To ensure that account determination is correct, you may need to define several debit and credit flow types per product category. This will depend on the flow types and account assignment references.

Maintain an account assignment reference to determine the corresponding balance sheet account for the target currency euro.

For the outflows and valuation flows, the system transfers the original account assignment references. For the other newly-generated flows, the account assignment reference is determined again.

Enter the euro exchange rates in the leading currency table, such as EUR/USD or EUR/DEM (for two participating currencies also EUR/EUR). In R/3 Customizing, choose Treasury ® Treasury Management ® Basic Functions® Transaction Management ® Currencies ® Define Leading Currency.

Maintain the exchange rate table. In R/3 Customizing, choose Global Settings ® Currencies ® Enter Exchange Rates.
Maintain the standing instructions for payment details for the currency euro. In the application menu, choose Master data ® Standing instructions ® Payment details.

Before the actual conversion, the conversion program runs the following checks:

All flows with due dates before the key date for the changeover which are relevant for posting must have been posted.

All open payment requests with due dates before the key date for the changeover must have been settled.

Interest and other flows are not transferred. To post any pre-posted interest flows to a euro account, you need to delete such flows before the changeover.