procedure foreign currency translation

8/11/2019 Procedure Foreign Currency Translation

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Procedure For Foreign Currency Translation

PurposeThis wiki provides an outline of configuation and posting for FASB52 logic. It outlines the help.sap.com documentation

in relation to example. Please be clear this is only an example, customizing can vary based on your own legal

requirements.

Overview

From help.sap.com documentation the following is stated on foreign currency translation

Currency Translation

Use

You can translate your account balances from local currency into group currency. The translation is performed in

accordance with FASB 52(US GAAP) or IAS.

However, you can also perform the currency translation for other currency types.

Integration

In General Ledger Accounting, you can only perform a currency translation as part of the foreign currency valuation.

Prerequisites

- You have performed a foreign currency valuation and have made all the settings for it in Customizing (see

Foreign Currency Valuation).

- You have defined account determination for the translation in Customizing for Financial Accounting (New).

To do this, in the Implementation Guide for Financial Accounting (New),choose General Ledger Accounting (New)-

> Periodic Processing->Valuate

-> Foreign Currency Valuation-> Define Account Determination for Currency Translation.

On the basis of the financial statement version, you can define different exchange rate types for each financial

statement item and thereby different exchange rates for the valuation.

Features

The account balances are translated from local currency into group currency.

Activities

- To perform a currency translation, from the SAP Easy Accessscreen, chooseAccounting-> Financial Accounting

-> General ledger/Accounts Receivable/Accounts Payable ->

Periodic Processing -> Closing -> Valuate -> Currency Translation of Balances.

- In the general selection data, enter a valuation area (for translation into group currency, for example, enter the

valuation area with your group currency).

Example:

* Attention: This is just an example for FASB 52 represented in SAP. The functional/reporting currencies are FASB 52

terms.

.......................................................................................................................................................

DC LC (10) LC2 (30)

[GBP] [USD] [EUR]


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OP 50 80 100

.......................................................................................................................................................

FAGL_FC_VALUATION

(Val.Area for curr. type 10) (*90) New amount after valuation

Val. Difference

Posting 0 +10 remeasurement in EUR -> +13

.......................................................................................................................................................

BALANCE: 90 113

.......................................................................................................................................................

FAGL_FC_TRANSLATION

(Val. Area for currency type 30) 90 Translation in to EUR -> (117)

Val. difference posting 0 0 +4

.......................................................................................................................................................

Sum: 90 117

Functional currency Reporting currency

The functional currency does not have to be always the local currency (currency type 10 in SAP).

General Customizing:

Company code/Local currency = USD

Implementation Guide: Financial accounting (New) -> Financial accounting global settings (New) -> global Parameters

for company code - Transaction code OBY6

Additional Local Currencies

Implementation Guide: Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Ledgers ->

Ledger -> Define Currencies of Leading ledger (Transaction code OB22)

OB22: The currency type 30 is defined as source currency = 2(Translation taking first local currency as basis),

otherwise the currency type 30 is not posted in the first step with the FAGL_FC_VALUATION (Remeasurement)


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Exchange rate at time of posting invoice

Implementation Guide: SAP NetWeaver -> General settings -> Currencies

(check all settings)-> Enter Exchange rates (Transaction code OB08)

Create customer invoice via FB70 - Display posted invoice via FB03


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Customizing for Foreign currency valuation

Implementation Guide:Finanical Accounting (New) -> General Ledger Accounting (New) -> Periodic Processing ->

Valuate

Define valuation Areas

Prepare Automatic Postings for Foreign Currency Valuation

Select Transaction KDF, enter Chart of Accounts


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Exchange rate at time of carrying out foreign currency valuation OB08

To perform a foreign currency valuation, from the SAP Easy Access Screen, choose Accounting -> Financial

Accounting ->

General ledger/Accounts Receivable/Accounts Payalbe -> Periodic processing -> Closing -> Valuate -> Foreign

Currency Valuation (New)

Transaction FAGL_FC_VAL (Program FAGL_FC_VALUATION)


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Valuation using valuation area which is assigned to currency type 10


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Execute

Click on Postings button


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To create valuation documents create postings must be ticked on, if you execute without create postings ticked, this

means that program is run in test mode.

If there are errors when posting, a batch input session is created (transaction SM35) Documents created view via FB03

Update run is saved in table FAGL_BSBW_HISTRY


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The valuation difference of 10 posted in currency type 10 i.e. the difference between 50 GBP * 1.6 = 80 USD

(exchange rate at time of posting invoice) and (50 GBP * 1.8 exchange rate at time of valuation from currency GBP toUSD) = 90 USD

The valuation difference of 13 posted in currency type 30 i.e. (the valuation difference is translated into the group

currency 10 USD* 1.3)

Customizing for Foregin Currency Translation


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Define valuation area

Valuation area for currency type 30

Define Account Determination for Currency Translation


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In Financial statement item 1013200 in fin. statement version CAUS the following two accounts are present:

140000 (Rec. Account for customers)

140099 (Adjustment account for Rec. Account 140000, posted by FAGL_FC_VALUATION)

Accounts 140000 and 140099 should be defined together in the same financial statement item (ob58) so

that FAGL_FC_TRANSLATION posts the valuation

for both accounts together in the same account (defined in V_FAGL_T030TR, can be the same account 140099).


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Foreign currency translation

To perform a foreign currency translation , from the SAP Easy Access Screen, choose Accounting -> Financial

Accounting ->

General ledger/Accounts Receivable/Accounts Payalbe -> Periodic processing -> Closing -> Valuate ->

FAGL_FC_TRANS (Program FAGL_FC_TRANSLATION)

Execute


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Click on postings Button

Generate postings must be selected on initial screen of FAGL_FC_TRANS for postings to be created Postings created

view via FB03


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Update run is saved in table FAGL_BSBW_HST_BL


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