Asset Not in Local Currency

If an asset is not carried in local currency (which means that the asset is carried in group currency), then you already record the additional financial data for this asset in both the local currency and the group currency.

In this case, the task for capitalization and valuation allowances (CVA) also posts entries in both currencies. The relationship between the values in local and group currencies does not change: The historical relationship of the recorded original values is retained for all key figures.

You assign two document types to the task in task customizing for capitalization and valuation allowances. The CVA task posts the values in group currency. Therefore, the subsequent currency translation task does not process the non-local currency-carrying document type used for posting assets.

Asset in Local Currency

If an asset is carried in local currency, the additional financial data for that asset contains values in local currency only. In this case, the task for capitalization and valuation allowances (CVA) posts values only in local currency, as well. A subsequent currency translation task determines the values in group currency.

The appropriations for assets item (which is used for the offsetting entries in the capitalization of assets) typically flows into the first consolidationactivity in consolidation of investments. Currency translation of asset appropriations related to first consolidation can cause delays in the delivery of first consolidation data. To avoid problems related to this, we recommend that you process these asset appropriations in a separate method step in currency translation.

This method step should not modify the target key figure of the asset appropriations related to first consolidation. Instead, it should post the translation difference to a different transaction type.

Then, the asset appropriations with the transaction type for posting the difference should trigger an increase in capitalization in consolidation of investments so that the effects of currency translation on the asset appropriations cause goodwill to be adjusted.