Currency Translation
Purpose
You can use this function to translate monetary amounts into a different currency.
Notably, you can translate the financial data reported by consolidation units into the group currency of the consolidation group. The consolidation system typically collects the financial data reported by consolidation units in local currency. You need to translate this data into group currency before you can create consolidated financial statements. Thus, you use this function if the local currency of one or more consolidation units differs from the group currency.
Furthermore, this function offers the following features:
You can carry out reference translations and you can record translation differences.
On the one hand, this makes currency-related impacts transparent. And on the other hand, you can ensure the accounting consistency of the translated data (for example, the matching of retained earnings in the balance sheet and annual net income in the income statement).
You can use different currency translation keys (for example, periodic and cumulative), or you can refrain from entering translation exceptions if individual data records are already in the target currency.
You can group together the accounting objects to be translated (for example, FS items) as selections in various ways, for example:
where a selection represents exactly one combination of currency translation key and exchange rate type
where for each selection you specify exactly one specific differential accounting object for the translation difference
where the selections represent steps, which the system executes consecutively.
Implementation Considerations
Currency translation requires an account-based data model (that is, a chart of accounts).
Integration
You can implement this function as part of the components SEM-BCS as well as SEM-BPS.
As an extension of currency translation, you should use rounding to correct rounding errors that can occur during currency translation.
See also: