Foreign Currency Valuation (SAP Library - FI Accounts Receivable and Accounts Payable)

Foreign Currency Valuation

Use

In order to create your financial statements, you have to carry out a foreign currency valuation. This valuation covers the following accounts and items:

Foreign currency balance sheet accounts, that is, the G/L accounts that you run in foreign currency.

The balances of the G/L accounts in foreign currency are valuated.

Open items posted in foreign currency.

The line items in foreign currency are valuated.

You have the following options for the foreign currency valuation:

You can carry out the valuation in local currency, (company code currency), or a parallel currency (for example, group currency).

You can also use different valuation methods (for example, lowest value principle).

In addition to the foreign currency valuation, you can also carry out a currency translation in accordance with FASB 52 (US GAAP). You can thereby translate your account balances from local currency into group currency, for example.

Prerequisites

To carry out a foreign currency valuation, you must first make certain settings in Customizing. You make the settings in Customizing under Financial Accounting → General Ledger Accounting/Accounts Receivable and Accounts Payable → Business Transactions → Closing → Valuating → Foreign Currency Valuation.

You must define the exchange rates. See Exchange Rates

You must also define a valuation method. Choose Define valuation methods.

You must also define the expense and revenue accounts for exchange rate differences from valuations. For payables and receivables accounts you must also define the financial statements adjustment accounts. To do this, choose Automatic postings for foreign currency valuations.

If you want to carry out a parallel valuation, you must also have defined a valuation area. Choose Define valuation areas.

The exchange rate differences from the parallel valuation are posted in this valuation area. If you carry out a parallel valuation with a different valuation method to the first valuation, you do not have to reverse the postings from the first valuation. This information is then available for subsequent closing operations, for example, Transferring and Sorting Receivables and Payables

Features

You can use report SAPF100 for the foreign currency valuation. This report carries out the following functions:

Valuation of foreign currency balance sheet accounts

Valuation of open items in foreign currencies

Saving the exchange rate differences determined from the valuation per document

Carrying out the adjustment postings required

Note

The following topics describe how to carry out foreign currency valuation using the reports, and how to post valuation differences. You can also make this posting manually. From the SAP Easy Access screen, choose Accounting → Financial accounting → General ledger → Document entry → Valuate foreign currency.

Activities

To carry out a foreign currency valuation, from the SAP Easy Access screen, choose Accounting → Financial accounting → General ledger/Accounts receivable/Accounts payable → Periodic processing → Closing → Valuate → Foreign currency valuation.