Currency Swap Posting: Loan Position 

Prerequisites

For the currency swap posting, you must be able to make postings to the clearing account for the currency swap and the balance sheet account in both euros and the original currency.

Procedure

 Example of a currency swap posting for a loan position

Remaining capital:

230,075.28 DEM (before conversion on the basis of the cash flow for the loan)

118,129.69 EUR (after conversion on the basis of the cash flow in Loans, without adjustments)

Rate EUR/DEM: 1,94765

Translation of the remaining capital amount of 230,075.28 at a rate of 1.94765 = 118,129.68 EUR.

There is a difference of 0.01 EUR, in other words, the remaining capital after conversion is too high by 0.01 EUR. This difference is taken off the books.

Posting records in FI in transaction currency:

Outflow:

 Debit currency swap clearing account

230.075,28 DEM

Credit balance sheet account

230.075,28 DEM

Inflow:

‚ Debit balance sheet account

118.129,69 EUR

Credit currency swap clearing account

118.129,69 EUR

The local currency amount is identical for both postings.

Post adjustment flow for remaining capital

Posting record:

ƒ Debit clearing account for changeover

0.01 EUR

Credit balance sheet account

0.01 EUR

Since you cannot post a local currency amount of zero in FI, the adjustment comprises two postings for technical reasons. In the second posting, the local currency amount is cleared, since only the contract currency is to be adjusted.

 

T-account example:

€ Basis: Position in DEM

 Currency swap outflow

‚ Currency swap inflow (balance on local currency side after posting = 0)

ƒ Adjustment posting for remaining capital

„ Position in EUR after the contract currency changeover.