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Prepare Automatic Postings for Foreign Currency Valuation

In this activity you define the numbers of the accounts to which you want the system to automatically post exchange rate differences when valuating open items and foreign currency balances.

You can also define the accounts for realized exchange rate differences during open item clearing. For more information on this, see the Define Accounts for Exchange Rate Differences activity.

You can use the currency type to control account determination during open item valuation and exchange rate difference posting. You could, for example, post gains in local currency and gains in group currency to separate accounts.

When valuating open items the system posts to a balance sheet adjustment account and to an account for exchange rate differences that occur during the valuation. Exchange rate differences could be either a gain or a loss. You store the account numbers accordingly.

The valuation of foreign currency balances requires a special key that is assigned the gain and loss accounts for posting any exchange rate differences that occur during valuation. You can freely define this key. You then enter it in the master records of the accounts that you want to valuate. To post the differences that are determined from a group of G/L accounts to the same gain or loss accounts, enter the same key for all these G/L accounts.

Note

You can differentiate the accounts by currency. Exchange gains and losses are then posted to the accounts designated for the currency involved. You must not change your accounts for the valuation posting after the first valuation run has taken place. Otherwise the postings can no longer be reversed.

If you do not want to differentiate the accounts by currency, do not make any entry in the Currency field (this is the default value), and also do not enter an exchange rate difference key in the company code area of the G/L accounts.

Standard settings

Posting keys are already defined in the standard system for posting the results from valuating open items and balances.

Activities

1. Determine the accounts for posting exchange rate differences and enter their account numbers. Check that the defined posting keys are the ones you require by choosing Goto -> Posting keys .
2. Make sure that the accounts for exchange rate differences are created.
3. Make sure that the required exchange rate difference key is entered in the accounts you want to valuate.

Additional information

For more information on valuation, see the "FI General Topics" and "FI Closing and Reporting" documentation.