Translation Keys
Currency translation keys define how exchange rate determination is to be carried out (for example, historically or using the spot exchange rate). The currency translation key also determines which initial currency is to be used in the FI-LC system: the local currency or the transaction currency.
The following currency translation keys are available:
The group currency (GC) value of the current period is calculated so that the sum of all GC values up to the current period results in zero.
An accumulated GC value is generated by translating the local currency amounts of all periods (starting with the carry-forward period up to the current period) using the current period’s exchange rate. This current-period accumulated value is then compared to the previous-period accumulated value. The difference is placed into the current period as the group currency value (see example below).
An accumulated GC value is generated by translating the local currency amounts of all periods (starting with the carry-forward period up to the current period) using the historical exchange rate of the asset’s year of acquisition. As in translation key 1, the difference between the accumulated values of the current period and the previous period is stored in the current period as the group currency value.
The exchange rate that is used for translating the investment values is entered in each record of the reported Changes in Investments table. In this case, you must not select the Read value from database indicator. Also see the explanations in
Otherwise, this procedure is similar to translation key 1.
This procedure is like translation key 3.
An accumulated GC value is generated by translating the local currency amounts of all periods using each period’s corresponding exchange rate. The difference between the current-period’s and previous-period’s accumulated value is placed into the current period as the group currency value (see example below).
In contrast to translation key 1, where all of the periods are translated at the current period’s exchange rate, translation key 5 translates each periodic value with its corresponding periodic exchange rate.
The exchange rate is determined in a user exit. Otherwise, this procedure coincides with translation key 1.
In contrast to the other translation keys, the transaction currency is the initial currency. The transaction currency values of all periods (starting with the carry-forward period up to the current one) are translated using the current period’s exchange rate. As in translation key 1, the difference between the accumulated values of the current and previous periods is placed into the current period as the GC value.
The example that follows illustrates the system’s actions in conjunction with translation keys 1 and 5.
Initial values:
Period |
Value for period in local currency |
Periodic exchange rate |
000 (Carry-fwd period) |
1000 |
- |
001 |
1000 |
0.8 |
002 |
1000 |
0.6 |
003 |
1000 |
0.7 |
Translation key 1:
Period |
Accumulated value in local currency |
Accumulated value in group currency |
Value for period in group currency |
000 (Carry-forward period) |
1,000 (carried forward) |
700 (carried forward ) |
700 (carried forward) |
001 |
2,000 |
1,600 |
900 |
002 |
3,000 |
1,800 |
200 |
003 |
4,000 |
2,800 |
1,000 |
Translation key 5:
Period |
Accumulated value in local currency |
Accumulated value in group currency |
Value for period in group currency |
000 (Carry-forward period) |
1,000 (carried forward) |
700 (carried forward ) |
700 (carried forward) |
001 |
2,000 |
1,500 |
800 |
002 |
3,000 |
2,100 |
600 |
003 |
4,000 |
2,800 |
700 |
The most common translations using the spot exchange rate or the average exchange rate are represented in procedure 1. The exchange rate indicator (entered in the functional area) allows for the distinction. It classifies the exchange rates in the exchange rate table. For example, 1 is set for the spot exchange rate, 2 for the average exchange rate; you can, however, use other indicators for exceptions. For example, you could set up different average rates, or also spot rates for your various translation entries.