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Clearing Open Items with Different Currencies

Description

In the SAP system, clearing open items in alternative currencies is possible since Release 2.2A. In particular, it is possible to clear items in local currency and items in foreign currency together.

If clearing such items is done in a currency that is neither the local currency nor the document currency, all items are translated into the clearing currency at the current exchange rate. Clearing is possible if the amounts translated into the clearing currency balance to zero.

If clearing such items is done in local currency, there are three procedures to choose from:

This first procedure aims to carry out a correct apportionment between exchange rate differences and payment differences when foreign currency invoices are paid in another currency (for example local currency). The following example explains this principle:

An invoice of 1000 USD is posted, the equivalent at this time is 1580 DEM. When the payment was made, the exchange rate of the USD increased from 1.58 to 1.63; the customer wants to settle the invoice with a payment of 1620 DEM.

If the historical value were taken as a basis, the customer would have paid 40 DEM too much. A gain from exchange rate fluctuation would not have been made.

If the current value of 1630 DEM is taken as a basis, an unearned deduction of 10 DEM and at the same time, a gain from exchange rate fluctuation of 50 DEM would result as correct value.

This form of OI processing for foreign currency invoices makes the use of clearing accounts in different currencies more difficult. This includes, for example, clearing accounts for invoice receipts and goods receipts, providing they are posted manually and goods receipts are always posted in local currency. Here clearing should be possible without further adjustment postings if the amounts correspond in local currency.

Example: The invoice receipt is posted with 1000 USD and 1580 DEM, the goods receipt with 1580 DEM. Upon clearing, no further translation of the 1000 USD is to be done but the historical value of 1580 DEM is to be used.

If such transactions only occur in the G/L account area, the second procedure can be chosen. Special G/L accounts are to be indicated in the master record.

This kind of processing becomes possible if the Only balances in local currency indicator is set in the master record of the G/L account. In this case, the transaction figures for a posting in foreign currency are recorded as if the posting was in local currency. When clearing, all items are dealt with as if they had been posted in local currency.

If no further calculation of the local currency amount in the customer and vendor area is required, the third procedure should be used.

Change system parameters in customizing

In order to use the second procedure, you are to indicate the master records of the affected G/L accounts. Select the Only balances in local currency field.

If the Only balances in local currency field is missing on your screens for maintaining G/L account master data, you can show the field via the General Ledger Accounting Implementation Guide. To do this, choose the "Define transaction-dependent screen layout for G/L accounts" step. On the following screen, you select the required activity (display, create, change) and press the Edit field status key. Then choose the Control group. On the following details screen, you can specify, for example, an "Opt. entry" for the Only balances in local currency field.

The setting to make for the third procedure (local currency amounts generally should not be calculated again when clearing) is to be selected per company code. You reach the appropriate screen for this in the "Financial accounting global settings" Implementation Guide via the "Enter global parameters" step; on this screen, select the No exch.rate diff.with clearing in LC field.