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Setting Parallel Currencies in Financial Accounting

Description

As of Release 2.2A, it is possible to manage two further currencies per company code in parallel to the local currency. Here the group currency, hard currency, index-based currency and global company currency are available for selection. Amounts for the currencies managed in parallel are stored in the documents and updated in G/L accounting. This release note describes which default settings are to be made in Financial Accounting to manage parallel currencies.

The currency that is specified in the client table is referred to as group currency.

A country-specific second currency that is used in countries with high inflation is referred to as hard currency .

A country-specific fictitious currency that is laid down for external reporting (for example, tax returns) in some countries with high inflation is referred to as index-based currency.

The currency used for an internal trading partner is referred to as global company currency.

Change system parameters in customizing

Providing you want to use hard currencies or index-based currencies , you must complete the specifications in the country table for the countries concerned. To do this, select the step "Define countries" in the "Global settings" Implementation Guide. On the detail screen for a country, you will find the Index-based currency and Hard currency fields where you enter the required currency keys.

For more information, refer to the "Global settings" Implementation Guide under "Define countries".

To determine which currencies are to be managed in parallel in a company code, choose the step "Define parallel currencies" in the Financial Accounting Implementation Guide.

You receive a list of the company codes that already manage parallel currencies. Using the New entries function, you can define parallel currencies for further company codes.

After you entered the required company code on the detail screen, the information for the local currency is displayed. You can now add one or two entries. To do this, make the following specifications:

1. Currency type
The currency type specifies the function of the currency to be managed in parallel. One example is the group currency, another the hard currency.
2. Exchange rate type
The exchange rate type determines which exchange rate defined in the system is used when calculating the additional amount fields. You can use the exchange rate type M (average exchange rate) as for the local currency or any other exchange rate type.
3. Base currency
Calculation of the amounts in the parallel currencies can be carried out based on the document currency or on the local currency. Here you decide on one of the two procedures.
4. Type of translation date
For translating the amounts, the exchange rate can be determined based on the translation date in the document header, the document date or the posting date. Here you decide on one of the three alternatives mentioned.

For more information, refer to the step "Define additional local currencies" under "Financial Accounting global settings" in the Financial Accounting Implementation Guide.

The update in the general ledger is carried out for the document currency and the local currency in the predefined ledger "00". Providing you manage the group currency in parallel, the corresponding amounts are also updated in this ledger. To do this, no special settings are to be made in the Special Purpose Ledger.

If you manage parallel currencies other than the group currency, you must determine in which ledgers the currency amounts are to be updated.

If these ledgers are to be updated on alevel of detail other than account, company code or business area or an update is not required for all company codes, you must use the Special Purpose Ledger module. For setting up such ledgers, refer to the respective Implementation Guide.

If these ledgers are to be managed analogously to ledger "00", the following procedure is recommended for creating the ledger:

1. In the Financial Accounting Implementation Guide under "Financial Accounting global settings", choose the step "Define additional local currencies for ledgers" and then the Ledger -> Create function.
2. On the following screen, you enter the required key for the new ledger. Choose a key starting with Y or Z to exclude name clashes with ledgers which SAP delivers with the standard system.
3. By pressing ENTER, you reach the next screen where you can specify the name of the ledger and can define the parallel currencies to be updated in this ledger. The latter is done using the Define currencies... key.
4. You complete the definition of the ledger by saving the entered data.

For further information, see the step "Define additional local currencies for ledgers" under "Financial Accounting global settings" in the Financial Accounting Implementation Guide.

Further notes

This release note has already been delivered with Release 2.2 in a slightly different version. However, the functions described above are only officially released with Release 3.0.