Select language:

Function documentation Valuation of Foreign Currency Balance Sheet Accounts 

Use

Your foreign currency balance sheet accounts are valuated as part of the foreign currency valuation:

  The balance, that is, the foreign currency balance of the G/L account managed in the foreign currency, forms the basis of the valuation for each foreign currency and foreign currency balance sheet account.

  The result of the valuation is posted to the valuated account or to a adjustment account.

  The exchange rate profit or loss from the valuation is posted to a separate expense or revenue account for exchange rate differences as an offsetting posting.

Example

The balance of your fixed term deposit account (foreign currency balance sheet account) has a balance of USD 1000 and EUR 1700 (see the following figure, 1). An exchange rate devaluation occurs at the time of the valuation. The account balance is now valuated with an exchange rate of 1.6300. The valuation programs posts the exchange rate difference to the fixed term deposit account and to the account for exchange rate differences (see following figure, 2).

 

This graphic is explained in the accompanying text

 

Note

As a result of the valuation, a difference arises in your local currency. However, only postings in the foreign currency specified in the master record (account currency) are permitted to foreign currency balance sheet accounts. The exchange rate difference is therefore posted with a foreign currency amount of zero, and a local currency amount equal to the exchange rate difference.

Prerequisites

To valuate your foreign currency balance sheet accounts, you must define expense and revenue accounts for exchange rate differences. You can group your foreign currency balance sheet accounts and define expense and revenue accounts for exchange rate differences for each group.

You group the accounts using an exchange rate key in the master record of the foreign currency balance sheet accounts. In Customizing, assign the expense and revenue accounts for exchange rate differences to this exchange rate difference key.

Make this setting in the Implementation Guide for Financial Accounting (New) under General Ledger Accounting (New) Periodic Processing Valuate Foreign Currency Valuation Prepare Automatic Postings for Foreign Currency Valuation. (For more information, see also under "Example").

Note

For more information on the Customizing settings, see Foreign Currency Valuation.

Features

You have the following options when defining the expense and revenue accounts for exchange rate differences:

If you perform parallel valuations with different valuation methods, you can also use your account determination from the valuation of open items in foreign currency for a specific G/L account. To do this, enter the G/L account in the account determination for the valuation of open items in foreign currency. If you have implemented parallel ledgers, the balance of the account read from the ledger in question and valuated.

  You can reset the valuations. By doing so, you recreate the status before the valuation run, that is, all valuations posted are set to zero by an inverse posting. To reset the valuations, enter the same selection criteria for the valuation run to be reset and set the Reset Valuations indicator.

Note

However, the valuations are only reset when a valuation is performed for the same key date and with the same valuation area. If an item is not valuated on that key date, it is not possible to reset the valuation for the item.

  You can subsequently reverse the valuation of the balances. For this, set the Reverse Postings indicator.

Activities

  To perform foreign currency valuation using the report and to post the valuation difference, go to the SAP Easy Access screen and choose Accounting Financial Accounting General Ledger Periodic Processing Closing Valuate Foreign Currency Valuation (New).

  To subsequently reverse the postings generated during foreign currency valuation, select the same report.

In the area For G/L Account Balance Valuation on the Foreign Currency Valuation selection screen, set the Reverse Postings indicator. (This indicator does not affect the valuation of open items)

  To perform foreign currency valuation manually, go to the SAP Easy Access screen and choose Accounting Financial Accounting General Ledger Posting Valuate Foreign Currency.

Example

Customizing for exchange rate difference using exchange rate difference key

You want to analyze the exchange rate profits and losses arising on foreign currency balance sheet accounts and securities accounts in USD separately. To do this, you create in Customizing separate expense and revenue accounts for exchange rate differences for these USD accounts. You create a joint expense account and joint revenue account for exchange rate differences for all other currencies. You can include the currency and the type of asset (for example, foreign exchange or security) in the exchange rate difference key.

 

Exchange rate difference key

Description

1USD

Foreign exchanges in USD

1

Foreign exchanges in other currencies

2USD

Securities in USD

2

Securities in other currencies

 

This example would require the following IMG entries in the activity Prepare Automatic Postings for Foreign Currency Valuation in the process Exch. Rate Diff. using Exch. Rate Key:

 

This graphic is explained in the accompanying text

 

 

 

 

Was this page helpful to you?