Valuation Method

If you want to make a foreign currency valuation, you must always specify a Valuation method. This specifies exactly which type of valuation will be carried out and how detailed the resulting list for the valuation is to be. If you are performing the valuation as part of the preparations for the balance sheet, you should enter an X in the field Bal. sheet adjustment val. If you are performing the valuation in the middle of the year, you should leave this field blank.

In this Demo, we are working with the valuation method VAL1. This is a valuation method especially for this demo.

This valuation method will always evaluate, that means, if you select this procedure, revaluations are also taken into consideration.

Valuation Run and Exchange Rate Differences

You can process several different currency types at the same time in a valuation run. Since different valuation methods may be used for different currency types, you can enter a valuation method each time for the local currency, group currency, hard currency, index currency, and global company currency.

Exchange rate differences resulting from the valuation of open items and foreign currency balance sheet accounts are automatically posted to specific accounts you configure in Customizing for Financial Accounting. To do this, select the activity Prepare automatic posting for foreign currency valuation in the General Ledger Accounting as well as in the Accounts Receivable and Accounts Payable Implementation Guides.

For IDES, we have maintained the following accounts using the chart of account CAUS:

E/R loss account: 230000 Foreign currency revaluation losses

E/R Gains account: 280000 Foreign Currency Revaluation Gains

We do not have any different accounts for different currencies, but if you want to maintain these settings in your own system, it would be desirable to have different accounts for different currencies.

When carrying out valuation of open items, you can configure account determination according to the currency and to the currency type so that, for example, currency gains in the local currency and in the group currency are posted to separate accounts.