Show TOC

 Specifying the Controlling Area Currency

Use

You use the controlling area currency for cost accounting. You specify the controlling area currency when defining the controlling area in Customizing for Controlling .

You can assign more than one company code with varying currencies to a controlling area. The system can derive the controlling area currency automatically from the company code currencies or currencies of other organizational units. Or you can specify the controlling area currency yourself.

Example Example

A German corporation has subsidiaries in Switzerland and the USA. The Swiss subsidiary uses the SFr (Swiss francs) currency for cost accounting purposes in its own company code. The American subsidiary uses USD. The corporation executes its cost controlling on a global basis in EUR.

End of the example.

Prerequisites

The controlling area currency depends on:

  • The assignment of company code and controlling area

  • The currency type in the controlling area.

You can specify the assignment control indicator, and the currency type in Customizing, under: Defining the Controlling Area .

If you choose the assignment of the controlling area at the same time as the company code, then you assign one company code to a controlling area. In this case, the controlling area currency corresponds to the company code currency.

If you choose the assignment of Cross Company Code Accounting, then you can:

  • Assign more than one company code to the controlling area, or

  • Specify a controlling area currency different from the company code currency.

The currency type then determines the controlling area currency.

Note Note

If you use a controlling area currency, which differs from the company code currency, the system automatically records the company code currency as the object currency for the CO objects. For example, when creating a cost center, the currency of the company code to which the cost center is assigned is automatically defaulted as the object currency.

End of the note.

Features

Controlling Area Currency Control

Company Code-CO Area Assignment

Currency type

Controlling Area Currency

Controlling area / company code

10

Use company code currency

Cross-company code cost accounting

10

Use company code currency

Cross-company code cost accounting

20

Independent controlling area currency

Cross-company code cost accounting

30

Group currency transfer.

Cross-company code cost accounting

40

Hard currency transfer.

Cross-company code cost accounting

50

Index-based currency transfer.

Cross-company code cost accounting

60

Global company currency transfer.

Use Company Code Currency (Currency Type 10)

You can transfer the company code currency to the controlling area. If you assign more than one company code to the controlling area, all company codes must use the same currency. In this case any object currency can be used.

Example Example

A German company owns a subsidiary in Mexico. The company code currency is MXP (Mexican pesos). The controlling area should be managed in the same way as the company code. This means that the controlling area currency is also Mexican pesos and you can define the object currency for CO objects as you wish.

Different subsidiaries of a German corporation produce balance sheets for two company codes in EUR. Joint cost controlling is executed for both subsidiaries. Use currency type 10 to specify that the company code currency is the same as the controlling area currency.

End of the example.

Use Group Currency (Currency Type 30)

You can use the company code currency for the controlling area if:

  • The assigned company code uses the group currency as a parallel currency, and

  • The group currency is stored in the corresponding clients .

If more than one company code is assigned to the controlling area, all these company codes must use the same group currency as a parallel currency.

Example Example

A German company owns a subsidiary in Mexico. The company code currency is MXP. The group currency EUR was defined and stored in the corresponding client, for external accounting. You can specify the group currency as the controlling area currency. In this case the company code currency MXP is the object currency.

A German corporation owns subsidiaries in Mexico and USA. The company code currencies are MXP and USD. The group currency EURO is the parallel currency for both company codes. You can therefore use the group currency EURO as the controlling area currency. The Controlling objects in the Mexican subsidiary must use MXP and the objects in the American subsidiary USD.

End of the example.

Using Hard Currency (Currency Type 40)

You can use the hard currency for the controlling area if:

  • The assigned company code uses the hard currency as a parallel currency, and

  • The hard currency is stored for the country that it is to be used for.

If more than one company code is assigned to the controlling area, all company codes must use the same hard currency as a parallel currency. The company codes must be in the same country, or the countries where the subsidiaries are located must all use the same hard currency.

Example Example

A German company owns a subsidiary in Mexico. The company code currency is MXP. USD is specified as the hard currency for external accounting and is stored for Mexico. The hard currency can be used as the controlling area currency. In this case the company code currency MXP is the object currency.

End of the example.

Using Index-Based Currency (Currency Type 50)

You can use the index-based currency for the controlling area if:

  • The assigned company code uses the index-based currency as a parallel currency, and

  • The index-based currency is stored for the land that it is to be used for.

If more than one company code is assigned to the controlling area, these company codes must use the same index-based currency as a parallel currency. The company codes must all be in the same country, or the countries where their subsidiaries are located must all use the same index-based currency.

Using Global Company Currency (Currency Type 60)

You can use the global company currency for the controlling area if:

  • The assigned company code uses the global company currency as a parallel currency, and

  • The global company currency is stored for the land that it is to be used for.

If more than one company code is assigned to the controlling area, these company codes must use the same global company currency as a parallel currency. The company codes must all belong to the same company, or the companies must be managed in the same hard currency.

Other Controlling Area Currency (Currency Type 20)

You can choose any of the currencies for the controlling area, from the currencies that you defined in Customizing.

Example Example

A German corporation owns subsidiaries in Mexico and USA. The company code currencies are MXP and USD. The hard currency USD is specified as a parallel currency for the company code in Mexico. USD can be chosen as the controlling area currency. The CO objects in the Mexican subsidiary must be recorded in the object currency MXP, and the CO objects in the American subsidiary must be recorded in the object currency USD.

By using the controlling area currency from the currencies of other organizational entities, you ensure that postings within Controlling appear in currencies relevant to external accounting. This is not the case if you specify any controlling area currency.

You can specify the assignment control and currency type indicators if

End of the example.
  • You redefine the controlling area, or

  • You have not yet assigned any productive company codes to it.

Once an assigned company code is productive, the currency type cannot be changed.