Currency Translation 

Use

The system performs this function if there is a mismatch between currencies  of collateral entities in a data constellation. The result currency for this function is determined using Customizing settings defined in the Implementation Guide (IMG) Customizing . The conversion rate is determined based on the day rate on the last date. Collateral Management uses the standard rate maintenance table provided by SAP for performing currency translation.

 

The following currencies are considered as default currencies for respective collateral entities:

●     Collateral objects – currency of asset value

●     Collateral agreements – currency of assessment amount

●     Receivables – currency of contract capital

Prerequisites

You must define the currency for client and bank area in the IMG Customizing for Collateral Management by choosing Collateral Management ® Basic Settings ® Organizational Settings.

Activities

The system performs the following activities to execute currency translation:

       1.      Determines if there is a mismatch in the currencies for collateral entities in constellation. If all collateral entities involved in constellation have the same currency, the system considers this currency for performing translation.

       2.      If there exists a mismatch and there are no collateral agreements in constellation, it considers client currency for performing translation.

       3.      If constellation comprises of collateral agreements that are not calculation relevant (system status not set to Calculation Relevant), then the system considers the client currency for performing calculations.

       4.      If constellation comprises of calculation relevant collateral agreements, the system uses one of the following conditions:

○     Considers bank area currency if:

■      If all collateral agreements in constellation belong to same bank area.

■      If collateral agreements in constellation belong to different bank areas that have same currency.

○     Considers client currency if:

■      If collateral agreements in constellation belong to different bank areas that have different bank currencies.

■      If bank area has not been specified for any one of the collateral agreements in constellation.

       5.      Selects the appropriate rate type from the Customizing settings in the Implementation Guide (IMG).

       6.      Determines the conversion rate from the standard rate maintenance table provided by SAP.

The conversion rate for the current system date is used for calculations. Updating the rates in the standard rate maintenance table is not within the purview of Collateral Management.

       7.      Executes currency translation for determining a unified currency for performing collateral calculations.

Result

The system determines a unified currency and translates all calculation-relevant parameters into one standard currency. These calculation-relevant parameters can then be used for performing collateral calculations.