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 After Euro Conversion: Notes on Subsequent Processes

Correspondence

Lease-out conditions

The correspondence program and the corresponding letter forms are provided to notify the converted condition amounts. Use the program to inform tenants of the new conditions of their lease-outs. The euro amounts are printed from the current (converted) lease-out conditions while the conditions valid prior to conversion are displayed in “old” currency.

The “old” currencies are not reconverted values but the original values prior to conversion.

Any benchmark figures to be displayed, such as the results of the service charge settlement for the previous period or the rent prior to the rent adjustment, were also converted into euro during the changeover and may be used for comparison purposes without further conversion.

(Program: RFVIEU01, for further information refer to the report documentation).

Correspondence enhancement

The following adjustments have been made to the correspondence report:

  • Amounts can be converted to the old local currency at the exchange rate valid on the day of the euro conversion.

  • The current local currency can be converted at any particular time to another currency maintained in SAP system, for instance the euro.

    Note Note

    The converted amounts are not saved but are temporarily used for printing correspondence.

    End of the note.

Lease-out/management contract

Result of conversion

The documents created by previous debit positions have been converted by the financial accounting program. The original posting amount remains in the “old” local currency as the transaction currency while the amount in the company code currency is converted to euro.

Postings for debit positions carried out at the time of the changeover use the euro as transaction currency.

Subsequent processes

You may reverse debit positions or make retroactive changes to conditions. Here you should be aware of the following effects:

  • If you reverse a debit position , the following actions are carried out:

    The accounting document from financial accounting is reversed.

    The related actual items in the cash flow of the lease-out are reset to status P (plan). This only applies to the actual items on which the original debit position were based.

    Any follow-up posting records for rounding differences created as a result of currency translation differences maintain their “actual” status. This ensures that no other local currency amounts other than those before the changeover appear in the debit position documents for follow-up postings without any real condition changes.

  • If you change the conditions retroactively, follow-up posting records are created. These conditions are based on the new lease-out conditions in euro, and for the next debit position the new documents will be posted in the euro transaction currency.

  • The adjustment history of the lease-out, required for taking account of rent caps for rent adjustments, was also converted to the euro. This ensures that any rent caps are considered during subsequent rent adjustments after the conversion to euro.

Incoming payments

Incoming payments processes payments in “old” currencies like incoming payments of foreign currencies after the changeover. This ensures the clearing of“old” amounts, i.e. those posted before the changeover (transaction currency = “old” currency, company code currency = euro) as well as “new” documents, i.e. those posted after the changeover (transaction currency = company code currency = euro).Minor difference on account of roundings are tolerated.

Service charge settlement

You may still reverse the service charge settlement after the changeover to the euro. All the accounting documents created by the settlement are reversed. Note that you cannot carry out further settlements in the “old” currency but only in euro.

The settlement results can be compared with the results of the settlements from the previous settlement period since the historical settlements were also converted to the euro. A comparison of the “old” currency is only possible by retroactive accounting in the correspondence program (change the forms).

Input tax treatment

During euro conversion, the tables containing information on the breakdown of the tax amounts into deductible and non-deductible portions were also converted. The conversion of the related documents in financial accounting is carried out with the conversion programs of financial accounting. The following situation may occur on account of the rounding differences:

A document with several items was assigned to account of several real estate objects. The tax amount appearing in the document is posted in one line (per tax code). From the RE viewpoint, however, the tax amount has to be split between the objects and the amounts resulting from the split divided into deductible and non-deductible shares.

Several entries are created in the input tax tables, whereas the original FI document only contains one input tax amount.

Before the conversion the sum of all entries in the input tax tables belonging to one original document is equal to the tax amount in the FI document.

This need not be the case after the conversion .

The situation for the breakdown postings is different:

The documents posted by the input tax distribution display the same level of detail and consequently the same amounts as the input tax tables. No difference is made here between the breakdown amounts in the input tax tables and the amounts in the FI documents.

The following processes are affected as follows:

  • Reversal of original document

    After implementing the input tax distribution, the original document can only be reversed after the related breakdown document has been reversed, as is the case before the euro conversion. Both of these reversal activities result in the setting of reversal indicators for the corresponding entries in the input tax tables. Conflicts arising from currency amounts that do not correspond are ruled out as a result of the linking of documents for checking purposes and the entries in the tax tables via the document numbers.

  • Input tax distribution reversal

    As explained in point a), you may carry out reversals after conversion.

  • Effects on the service charge settlement

    The rounding problem described above has no bearing on the service charge settlement since adjustment postings for input tax are carried out in any case according to the actual costs distribution between commercial and non-commercial tenants.