Valuation of Open Items in Foreign Currencies.

All open items in foreign currency are valuated as part of the foreign currency valuation:

·         The individual open items of an account in foreign currency form the basis of the valuation, that is, every open item of an account in foreign currency is valuated individually.

       Example of open items are customers, Vendors, GL accounts managed on open item basis (SKB1-XOPVW = X)

·          The total difference from all the open items in an account is posted to a financial statement adjustment account. The account therefore retains its original balance.

·         The exchange rate profit or loss from the valuation is posted to a separate expense or revenue account for exchange rate differences as an offsetting posting. 

·         A valuation cannot be made by posting to the payables/receivalbes account, since reconcilation accounts cannot be directly posted to.

       For this reason the amount is posted to an adjustment account, which appears in the same line of the balance sheet as the reconcilation account .

Example:

Local currency of company EUR -

1)   Implementation Guide: Financial accounting (New) -> Financial accounting global settings (New) -> global Parameters for company code - Transaction code OBY6 

2)  Exchange rate 1 USD = 1,7 EUR
Implementation Guide: SAP NetWeaver -> General settings -> Currencies
(check all settings)
-> Enter Exchange rates (Transaction code OB08)

3) Create invoice
 SAP Easy Access -> Accounting -> Financial accounting -> Accounts payable -> Document entry -> FB60 Invoice

Post

Display via FB03  

4) Change in exchange rate occurs 1 USD now equals 1,63 EUR  in OB08
5)  SAP Easy Access Screen choose -> Accounting -> Financial Accounting -> Accounts Payable -> Accounting -> FBL1N - Display/Change Line items 

6) Prior to performing a foreign currency valuation review of customizing:

 Implementation Guide:Finanical Accounting (New) -> General Ledger Accounting (New) -> Periodic Processing -> Valuate --> Define valuation Method.

Here Under Valuation Procedure Tab radio button should ON for always evaluate, give document type as "SA", Exchange rate for Debit and Credit should "M", and select radio button for Determine Exch. rate type for account bal.

7) Define Valuation Area,Patha ==> Finanical Accounting (New) -> General Ledger Accounting (New) -> Periodic Processing -> Valuate --> Define valuation Areas
8) Define Accounting Principles
Finanical Accounting (New) -> General Ledger Accounting (New) -> Periodic Processing -> Valuate --> Define valuation Areas

9) Check Assignment of Accounting princples to ledger Group

Fianancial Accounting(New) --> Financial Accounting Global Setting (New) --> Ledger --> Parallel Accounting --> Assign Accounting Principles to ledger Group

*required if you have more than one ledger 

 

Perpare Automatic Postings for Foreign Currency Valuation

Select Transaction KDF, enter Chart of Accounts in OB40 

 
 

The Target Accounts for KDB/KDF can also be defined per valuation area 

Account Determination per Valuation Area 

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) 

Excute--> 

Click on Postings button 

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

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

Update run is saved in table FAGL_BSBW_HISTRY 

This avoids that a valuation run for the same valuation (key date) can be repeated.

Thanks