Multiple Currencies and Valuations for Materials 

Purpose

Using the component Actual Costing/Material Ledger, you can carry values for materials in up to three currencies. If you use the functions for parallel valuation, the values in each currency can also represent a valuation view (such as legal valuation, group valuation, and profit center valuation).
The combination currency/valuation is a valuation approach.

Integration

The system makes historical currency translation possible for valuation-relevant transactions. This means that items are translated using the exchange rate that was valid at the time of posting that item.

Currency amounts that come from stock valuation, invoice verification, cost estimates, and order settlement are translated into the other currencies in the respective areas and updated in the material ledger.

You post an invoice receipt. The system translates the amount into the currencies specified in the material ledger at the current exchange rate.

You settle a production order that is carried in two currencies/valuations. The values in the production order correspond to currencies/valuations that are carried in the material ledger. These values are not translated in the material ledger, but rather transferred directly. The amount in the third currency is translated from the company code currency using the average rate.

You mark a standard cost estimate, which has results in two currencies/valuations. The results are not translated in the material ledger, but rather transferred directly. The amount in the third currency is translated using the amount in the company code currency and the exchange rate at the time of marking.

During actual costing, the system calculates new valuation prices and new inventory values independent of each other in the different currencies/valuations.

This procedure also means that over the course of time, the price of a material could rise in one currency while falling in another.

In Customizing for Financial Accounting, you can determine whether translations should take place working from the transaction currency (currency of a document when received by the system) or in the company code currency. You can also determine which exchange rate type should be used for the translation, such as translation at average rate.

Features

In the standard system, exchange rate differences are calculated in which the exchange rates at goods receipt and invoice receipt are compared. In Customizing for Invoice Verification, you can specify that exchange rate differences should not be translated using the exchange rate at goods receipt, but rather with an assumed exchange rate, which can be held constant for a period of time (such as a year or a season). Using these Customizing settings, you can also specify that all exchange rate differences are to be regarded as price differences.

See also:

Multiple Value Flows in Financials

Multiple Values for Material Stocks Using the Material Ledger