Contract currency for contract management

For a revenue accounting contract that involves multiple local currencies, the system manages most of the calculations in one single currency, which is known as the contract currency. The system uses the contract currency to allocate the transaction price among performance obligations and to track fulfillments. When the back-end operational system requests the creation of a contract, it specifies a contract currency. Typically, this currency is the document currency of the operational document. For example, this may be the document currency of the corresponding sales order.

The system uses the contract currency as the transaction currency when making revenue postings to the general ledger.

Multiple local currencies for revenue postings

When transferring revenue postings to the general ledger, the system uses the local currencies that are defined for the company code as the local currencies.

Fixed exchange rate for revenue postings

For each revenue accounting contract, the system uses a fixed exchange rate to calculate currency exchanges for all revenue postings. This exchange rate is calculated at the exchange rates of the date of the first revenue-related event. For example, if a contract is invoiced before any delivery occurs, all the subsequent currency exchanges are based on the exchange rates of the date on which the invoice is issued. When delivery is actually made, the system also uses the exchange rates of that earlier date to perform currency translations.

Currency exchange difference

The system books exchange differences into predefined accounts. You can use transaction OB09 to define these accounts. In the configuration, make sure that the exchange difference accounts are associated with the Receivable Adjustment account (the Receivable Adjustment account that you specify for account determination).