Execution of a Currency Translation (SAP Library - Business Consolidation (SEM-BCS))

Execution of a Currency Translation

Purpose

You apply this process to translate a consistent set of data to a target currency and to disclose currency translation differences – as compared with a reference translation.

In particular, this process enables you to:

Translate individual financial statements of consolidation units into the common group currency
Present in a common currency planning calculations performed in different currencies.

Process Flow

Currency translation may comprise multiple steps, each of which can contain its own sub-steps – that is, the steps can be defined in a hierarchy.

In order to execute currency translation, you first define its preliminary structure in the method layout; that is, you define the following:

the number of levels the step hierarchy of this method layout contains
which characteristics will appear in fast entry when defining a method (fast entry is discussed later on)
the first level of the step hierarchy in which you later during the definition of a method can view and/or enter selection, source key figures , currency translation key, exchange rate determination, and currency translation difference.

In the definition of the method you define the details of the currency translation. Fast entry features an overview of the currency translation steps. Fast entry enables you to create steps and to navigate among these steps. You define a global reference translation for the entire method. For each step you determine which currency translation key and exchange rate indicator are used, and how the currency translation differences are posted. The system executes the steps in the desired sequence. This means that the system takes into account the results of the preceding step when executing the next step.

The process flow in detail:

A. Customizing

Define exchange rate indicators, translation ratios, exchange rates

Define the exchange rate indicators, translation ratios, and exchange rates for the currency translation.

Define task

Define a task for the currency translation.

Define method layout

Create a new method layout with the type currency translation, or use an existing one.

Do the following when creating a new method layout:

In the screen for defining the currency translation, define the number of levels the step hierarchy contains.

In order to define a method later on, also specify:

from which level of the step hierarchy you are able to see the selection as well as the currency translation difference. You change the visibility by dragging the arrows over to the desired row,
from which level of the step hierarchy you are able to view and enter the target key figures, the currency translation key, and the exchange rate determination. You control this by dragging the cross icons to the desired row;

Note

The source key figure can only be defined globally for the entire method – that is, for all steps.

which characteristics will appear in fast entry when defining a method

Note

If you only want a single step for the currency translation, there is no need to designate characteristics for fast entry.
You can remove characteristics from the table by dragging them onto the trash folder.
You can delete a step by dragging it to the trash folder.

Recommendation

We recommend that you designate the characteristic for the accounting object (for example, the financial statement item) for fast entry at the topmost level of the step hierarchy for selection and currency translation difference. This later provides a good overview of the selections along with their differential accounting objects.

Save the method layout definition.

Define method

Create a method for the method layout.

First, globally define (at the top level) the reference translation for all steps including the following:

Target key figure You can define the currency key for the target currency either explicitly right here, or you can copy it from the data record (if it exists in the record) without making an entry here.

Source key figure

Exchange rate type

Note

The reference translation is always "aggregated" with the currency translation key.

In fast entry, create a step for each combination of currency translation key and exchange rate type. For example, when you create a step for the translation of stockholders' equity, you would specify the equity items as range of item numbers from, say, 170000 to 170399.

If you also specified differential accounting objects for fast entry, for each step you enter the accounting object, to which the translation differences are to be posted (for example, item 250900 for the currency translation differences when translating the stockholders' equity).

For an item you can or must specify one or more subassignments; for each subassignment you can select the Default indicator and/or specify a characteristic value for the subassignment.

Note

The differential accounting object must be outside of the matching selection if you post values in the source currency to the accounting object.

Define the Specific Translation for each step (and thus, for each group of accounting objects to be translated): Determine which currency translation key and exchange rate type is to be used in the specific translation.
Save your entries.

Assign method

Assign the currency translation method to the task and the corresponding consolidation units.

B. Starting the Currency Translation

Execute the currency translation by running the corresponding task in the consolidation monitor.

Result

A confirmation message is displayed after successful execution of the currency translation. The translated data is then available in the InfoCube for transaction data.