Valuing Foreign Currency Loans (SAP Library - European Monetary Union: Euro (CA-EUR))

Valuing Foreign Currency Loans

Prerequisites

If you have loans in a participating EMU currency that were originally foreign currency loans, you must carry out a foreign currency valuation before you change over the contract currency.

If you do not value foreign currency loans before you change over the contract currency, problems arise when you carry on processing the loan. Before the start of the dual currency phase, you must therefore perform a (one-time) foreign currency valuation for all loans in currencies participating in EMU (that differ from the local currency).
You must value all the relevant foreign currency loans using a one-step valuation principle that calculates the full valuation gain or loss.

Procedure

Valuation

Choose Loans ® Accounting ® Period-End Closing ® Valuation of Foreign Currency Loans. Run the valuation for all loans where the contract currency is a participating currency for EMU and differs from the local currency.

Maintain the flow types for write-ups and write-downs in Customizing. Assign the flows to the flow category XD and maintain the Customizing settings for accounting.

You must also define a corresponding valuation principle in Customizing. The principle you select must disclose the valuation gain or loss up to the key date. You choose this valuation principle on the selection screen for foreign currency valuation.

Special items for gains and losses resulting from fixed euro rates

The system posts gains and losses resulting from the changeover to the euro to the accounts for realized gains and losses.

If you opt to create special items for these gains and losses, you need to do this manually in FI.

You also need to write back the special items manually.