sap foreign currency revaluation

SAP FOREIGN CURRENCY

REVALUATIONFAS 52 and GAAP Requirements

SUSANNE FINKE

John Wiley & Sons, Inc.

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REVALUATION

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REVALUATIONFAS 52 and GAAP Requirements

SUSANNE FINKE

John Wiley & Sons, Inc.

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This book is printed on acid-free paper.

Copyright © 2006 by ZANN Consulting LLC. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Finke, Susanne, 1962–SAP foreign currency revaluation: FAS 52 and GAAP requirements / Susanne Finke.

p. cm.Includes index.ISBN-13: 978-0-471-78760-0 (cloth)ISBN-10: 0-471-78760-4 (cloth)

1. Foreign exchange—Accounting. 2. Financial statements. I. Title.HG3853.7.F565 2006

657—dc22

Printed in the United States of America

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www.wiley.com

To my husband, Kelly, who has always supported andencouraged me through the long hours I’ve kept on projects andmany missed weekends; to my parents, Harry and Grace, who

always told me I could do whatever I set my mind to.

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CONTENTS

Preface xi

Acknowledgments xiii

1 U.S. Accounting Requirements 1

FASB 52: Requirements Overview 1

FASB 52: Currency Exchange Rates 2

FASB 52: Currency Translation 4

Organization Impacts 4

2 SAP Revaluation Overview 7

SAP Revaluation Overview 7

Realized Gain/Loss Postings 10

Stock Transfer Impact 11

Tax Impacts 12

Business Example 12

3 G/L Account Indicator Impact 19

G/L Account Currency 19

Balances in Local Currency 21

Exchange Rate Difference Key 22

Valuation Group 23

Open Item Indicator 23

Line Item Indicator 24

Gain/Loss G/L Account Setup 25

Balance Sheet Offset Accounts 26

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4 Revaluation without Valuation Areas 27

Cumulative Revaluation “Type 10”: Period 1 Setup andExecution 1/31/2005 29




Cumulative Revaluation “Type 30”: Period 2 Execution2/28/2005 57

Incremental Revaluation “Type 10”: Period 1 Setup andExecution 1/31/2005 60




5 Revaluation with Full Valuation Areas 77

Revaluation “Type 10”: Period 1 Setup and Execution1/31/2005 79




Unique Configuration 113

Define Deprecation (Valuation) Areas 113

Foreign Currency Valuation: Automatic Postings 114

CONTENTS

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6 Revaluation with One Valuation Area 119





Unique Configuration 155

7 Common Revaluation Configuration 157

Define Local Currencies per Company Code 157

Exchange Rate Types 159

Define Valuation Methods 160

Define Document Types for Currency Revaluation 164

Revaluation Account Assignments 166

Account Assignments for Valuation: Non-Open Items (V-T030S) 167

Account Assignments for Valuation: Open Items (V-T030H) 170

Translation 173

Incoming Payments: Translation Posting Activation 175

Payment Program Translation Activation 176

8 Valuation Variant Setup 179

List/Calculation Variant 179

Posting Variant 181

Appendix 183

References 185

Glossary 187

Index 191

CONTENTS

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PREFACE

This book was written for those in the finance areas of organizations who areresponsible for foreign currency revaluation, as well as SAP functional con-sultants. This book was primarily written for SAP implementations, but thegeneral accounting principles and calculations on currency revaluation arecovered in this book and would be beneficial to anyone with or without SAPwith foreign currency transactions. The book is divided into three primarysections: statutory requirements, business execution of currency revaluationin SAP, and the configuration of SAP currency revaluation.

Chapter 1 covers the U.S. Accounting statutory requirements, net in-come, organizational, and financial consolidation impacts. This chapter dis-cusses the Statement of Financial Accounting Standards No. 52 (FAS 52) inhigh level and provides the link to the official accounting document.

Chapter 2 is an overview of currency revaluation. This chapter brieflydiscusses stock transfer and tax implications and gives high-level overviewexamples and a discussion on currency revaluation.

Chapter 3 covers the General Ledger (G/L) Master Data Indicator Im-pacts. The setup of these G/L indicators, which are usually driven by thebusiness analysts in the finance department, do not normally have corporatestandards defined regarding the usage and impact of these settings. This chap-ter is intended to help define corporate standards for these indicators and ex-plain the impact of these settings on currency revaluation.

Chapter 4 is one of three methods available to run currency revaluation.Currency revaluation without using valuation areas is the way most compa-nies execute revaluation because this was originally the only method avail-able to run revaluation by SAP. This method allows for the posting ofrevaluation cumulatively, where revaluation and exchange rate difference iscalculated each month on the original posting amount, and the same amountis posted to reverse on the first day of the next month. This method also al-lows for the posting of revaluation incrementally, where revaluation is not re-versed each month, and only the incremental difference is posted each month.

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Chapter 5 covers one of the newer ways the SAP R/3 software providesto execute currency revaluation. This method requires specific unique con-figuration that is also covered in this chapter.

Chapter 6 covers a variation of the first and second valuation methods. Ituses only one valuation area to execute and is much simpler to implement.This is the preferred method of implementation that most companies are mov-ing toward. This section also requires minimal unique configuration that iscovered in this chapter.

Chapter 7 is the “common” configuration to all currency revaluation. Any-thing specific to a valuation method is covered in the respective chapter. Thischapter is placed toward the end of this book, because it is highly technical.

Chapter 8 shows how custom variants can be set up to view the criticalfields used in the currency revaluation. The default display for the posting tabused after currency revaluation is complex and includes many unnecessaryfields. This view provides a one-page display of the proposed or final postings.

In addition, the Appendix provides some of the commonly used transac-tion codes (T-Codes) in SAP R/3. The References provide the SAP OSS notesthat are noted throughout the book. Finally, the Glossary provides definitionsof terms used in the book to provide a common platform for discussion.

Throughout the book, certain important facts appear in grey shadedboxes. These facts are key to assumptions or facts in currency valuation, andspecial note should be taken if one of these boxes is presented. An exampleof this is:

Suggestions for the next version of this SAP book or new topics for SAPbooks will be received at [email protected].

Open Item managed G/L accounts cannot be archived unless theyare managed properly and cleared accordingly.

PREFACE

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ACKNOWLEDGMENTS

I would like to thank my colleagues and clients that have taken the time to en-dorse this book, Kalpesh Khandhadia, Nadean L. Moore, Dave Paz, and RonRoberts. I would especially like to thank Ron Roberts, my client at HollisterIncorporated, who took time out of his personal life to read and assist in edit-ing the first drafts of this book.

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REVALUATION

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1

1U.S. ACCOUNTING

REQUIREMENTS

HIGHLIGHTS

• FASB 52 Requirements Overview

• FASB 52 Currency Exchange Rates

• FASB 52 Currency Translation

• Organizational Impacts

FASB 52: REQUIREMENTS OVERVIEW

The Financial Accounting Standards Board’s (FASB) Statement of FinancialAccounting Standards 52 (FASB 52), Foreign Currency Translation, definesthe U.S. generally accepted accounting principles (GAAP) requirements forforeign currency revaluation. The complete Statement can be found on theFASB website http://www.fasb.org.

U.S. GAAP requires that Financial Statements be reported in the Func-tional or Local Currency of each reporting entity. If the Transaction Currency(currency in which the transaction takes place) is not the same as the LocalCurrency, then the Transaction Currency must be revaluated into the LocalCurrency using the exchange rate on the key date specified during valuation.The difference between the original posting value and the revaluated amountvalue results in a financial gain or loss posting on the Financial Statement.

It is important to note that the legal definition of the Country Currencyshould be represented in SAP as the Local Currency. FASB 52 helps definethe legal Local Currency.

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When a transaction posting occurs in a currency other than the Local Cur-rency, both the Transaction Currency and the Local Currency get posted on theline item posting in SAP. If a Group Currency (a common reporting currency)is defined, then the Group Currency will be posted along with the TransactionCurrency and the Local Currency. The exchange rate used to convert the cur-rencies is that which is in the currency exchange rate table for the postingstranslation date. This translation date is normally the posting date, but anotherdate may be specified. Assuming these currencies are revaluated on a date dif-ferent from the translation or posting date, a Gain or Loss (depending onwhether the exchange rate goes up or down) will occur and be posted.

FASB 52 requires that revaluation occur on all foreign currency itemsthat are part of an asset or liability period-end balance. Every foreign cur-rency open item is revaluated individually, and the total currency adjustmentGain or Loss is normally posted to a Financial Statement Profit and Loss(P&L) Adjustment Account. In SAP, the account that is being valuated re-tains its original balance. The balance sheet currency valuation adjustment isposted to a balance sheet account associated with the original account. Theoriginal asset or liability account and the balance sheet adjustment account(with the currency adjustment posting) are reported in one item on the Finan-cial Statement. The Gain/Loss posting is reported in Net Income for that pe-riod in the Financial Statement unless the transaction hedges a foreigncurrency commitment or net investment in a foreign entity. In this case, theGain/Loss is reported in the Cumulative Translation Adjustment (CTA) ac-count in the equity section of the Financial Statement.

FASB 52: CURRENCY EXCHANGE RATES

Paragraph 12 of the FASB 52 (December 1981) states:

All elements of financial statements shall be translated by using acurrent exchange rate. For assets and liabilities, the exchange rate atthe balance sheet date shall be used. For revenues, expenses, gains,and losses, the exchange rate at the dates on which those elements arerecognized shall be used. Because translation at the exchange rates atthe dates the numerous revenues, expenses, gains, and losses are rec-ognized is generally impractical, an appropriately weighted averageexchange rate for the period may be used to translate those elements.

SAP FOREIGN CURRENCY REVALUATION

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Paragraph 27a of FASB 52 (December 1981) states:

Foreign Currency Transactions—The applicable rate at which a par-ticular transaction could be settled at the transaction date shall be usedto translate and record the transaction. At a subsequent balance sheetdate, the current rate is that rate at which the related receivable orpayable could be settled at that date.

The interpretation of this requirement that some companies use is thefollowing:

In order to be in FASB 52 compliance, balance sheet accounts withforeign currency postings (e.g., open payables/receivables) must berevaluated to the Local Currency using the exchange rate in affect asof the balance sheet date. Revaluation is normally run on a period-end basis as part of month-end close using at a minimum an averageexchange rate method (spot rates are the preferred method).

P&L Accounts in a foreign currency, represented by revenues,expenses, Gains/Losses will use the spot exchange rate on the datethose postings were recognized. If a spot rate is not available the av-erage rate could be used.

If at all possible, use the spot rate when calculating the balance sheet andP&L account currency revaluation (Gain/Loss postings and currency transla-tion from Functional Currency to Group Currency). Adjustments posted toCTA should be recorded similarly. SAP has many transaction codes thatallow for updating the foreign currency exchange rates; OC41 is one of them.

The assumption is made throughout the book that the exchangerate varies from day to day (which it normally does). If, however, itdoes not fluctuate from the original posting date to the date inwhich Currency Revaluation is run, there will not be a currencyrevaluation posting difference.

Because realized exchange rate fluctuations can occur daily,exchange rates should be maintained or updated daily either man-ually or by an interface such as Bloomberg. It is highly recom-mended that the exchange rate updates be automated.

U.S. ACCOUNTING REQUIREMENTS

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FASB 52: CURRENCY TRANSLATION

FASB 52 uses the terms valuation, revaluation, and translation interchange-ably. For the purposes of this book, we will use “revaluation” to indicate therevaluation of the Financial Statements from Transaction Currency to LocalCurrency and “translation” as the Local to Group Currency adjustmentprocess.

If the Reporting Currency of the Financial Statements is different fromthe Local Currency, then the Financial Statements must be translated from theLocal Currency to the Reporting Currency at the exchange rate of the Finan-cial Statement date (normally period-end). This is necessary to report theconsolidated Financial Statements of an entire organization in a single cur-rency. This is for internal financial reporting and does not affect the externalfinancial reporting of a company. These translation adjustments are not in-cluded in the Net Income, but are reported in a separate component of con-solidated equity with the sale or liquidation of the net investment that occursin a foreign entity.

ORGANIZATION IMPACTS

In order to be in FASB 52 compliance, balance sheet accounts with foreigncurrency postings must be revaluated to the Local Currency using the ex-change rate in effect as of the balance sheet date. Revaluation is normally runon a period-end basis as part of month-end close using at a minimum an av-erage exchange rate method (spot rates are the preferred method). Companiesthat required consolidated financial statements have different currency reval-uation requirements. Companies that produce consolidated financials thathave foreign currency postings must translate Local Currency postings intoreporting currency. The impact to financial statements is discussed in highlevel as follows.

Consolidated Financial Statements

Local Currency balance sheets of consolidated foreign subsidiaries are trans-lated according to their functional currency into the Group Reporting Cur-rency at period end using key date exchange rates. The Income Statements are


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translated at annual average rates. Translation differences of assets and lia-bilities between the balance sheet and Income Statements do not affect in-come. They are included in Other Income in the consolidated statements inshareholder’s equity. Foreign currency assets and liabilities are translated atperiod-end closing rates with Gains/Losses reflected in Net Income.

Net Income Impacts

Currency fluctuations that affect cash flows are included in the calculation ofNet Income. These would be the Gains and Losses resulting from the re-valuation of components of assets or liabilities that originated from foreigncurrency postings. Gains and Losses resulting from normal short-term or im-mediate foreign currency intercompany transactions are also included in theNet Income for the period.

Consolidation results should not be included in the Net Income calcula-tion. Long-term intercompany investments in a foreign entity are part of acompany’s net investment strategy (without immediate Gains or Losses) andshould not be included in Net Income. Examples of investments that are notincluded in the Net Income are demand note payables and advances that arenot immediately planned.

U.S. ACCOUNTING REQUIREMENTS

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2SAP REVALUATION

OVERVIEW

HIGHLIGHTS

• SAP Revaluation Overview

• Stock Transfer Impact

• Tax Impact

• Business Example

There are two different types of revaluation: Revaluation “Type 10,” whichrevalues asset and liability transaction postings to Local Currency, and Reval-uation “Type 30,” which revalues the asset and liabilities into Group LocalCurrency by using the difference between the exchange rates.

SAP REVALUATION OVERVIEW

In SAP there are two ways to calculate and post the revaluation “Type 10”:

1. Transaction to Local Currency Only

2. Transaction to Local Currency with Group Currency Translation

Unrealized Gain/Loss Posting

Unrealized Gain/Loss postings are a result of the period-end currency revalua-tion execution. The postings do not become realized until the items are cleared.

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The FASB 52 requirements necessitate a revaluation of these open bal-ances (items not cleared) based on the FASB 52 rules. At month-end, cur-rency revaluation should be executed on all foreign currency balances thathave not cleared (with the exception of those long-term investments notedearlier). The balances will be revaluated based on the currency exchange rateon the evaluation key date. The differences between the originally translatedposting amounts and the revaluation amounts will be posted in SAP as unre-alized Gain/Loss postings.

Ways to Run Revaluation

There are three primary ways to configure and run the revaluation. Each willbe covered in more detail in its respective chapter. It should be noted that un-less business reasons necessitate using process one or two, process three isrecommended due to simplicity and compliance with FASB 52 and GroupCurrency reporting requirements.

1. Revaluation without valuation areas and no translation, incre-mental postings. Revaluation 10 (Transaction Currency to LocalCurrency) is simply calculated by taking the difference from the cur-rent period’s valuated balance, less the prior period’s valuated bal-ance for Local Currency. There is no accompanying Group Currencytranslation posting of the Local Currency valuated difference.

Revaluation 30 (Local Currency to Group Currency) is simplycalculated by taking the difference from the current period’s valuatedbalance, less the prior period’s valuated balance for Group Currency.

This can only be posted incrementally without reversals posted.This was the original revaluation created by SAP and is not FASB 52compliant.

This revaluation method can be executed cumulatively with no re-versals taking place. Group Currency translation still does not occurwithin this variation of execution. It is executed exactly as the incre-mental method, but the “balance sheet preparation valuation” indi-cator is not selected in this method, thus the postings are reversed.


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2. Revaluation with valuation areas with translation using full val-uation areas. Revaluation 10 (Transaction Currency to Local Cur-rency) is simply calculated by taking the difference from the currentperiod’s valuation, less the prior period’s valuation for Local Cur-rency. The additional posting included in this method is that SAPtakes the revaluated difference in Local Currency and translates thatamount to Group Currency. This piece is required for the correct Cu-mulative Translation Adjustment (CTA) calculation.

Revaluation 30 (Local Currency to Group Currency) is calculatedby taking the current period’s valuated Group Currency balance, lessthe original Group Currency valuated balance, and less the cumulativetranslation amount in Group Currency (from the revaluation 10 step).

3. Revaluation with translation using one valuation area. This is theminimal configuration required to be FASB 52 compliant and stillconfigure the primary account assignment table (V-T030H), as op-posed to having to configure the valuation area table (V-T030HB).

The calculations for this methodology are similar to revaluationusing full valuation areas, but the benefits are that only one valuationarea is required, and the additional account assignment table does not have to be maintained. The original account assignment table (V-T030H) can still be used. The valuated balance is different fromrevaluation with full valuation areas, but the calculation results areidentical.

Execution

Transaction code F.05 runs currency revaluation for open items and nonopenitems for SAP R/3 4.7. F.06 (used in earlier versions of SAP R/3) is no longeravailable in 4.7 and will not be discussed here.

It is recommended to execute the program in the background when exe-cuting it to create postings in production. Runtimes for cumulative revalua-tions can be extensive depending on the field selections, the transactionvolume, and the method of execution.

Normally, the revaluation is run for all company codes. Business reasonsmay require running the revaluation for various company codes separately.Some of the driving reasons may be:


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• A need to either revaluate one or more General Ledger (G/L) accountsfor one company and not others, or to not revaluate one or more G/Laccounts for a particular company

• The need to run revaluation daily for some companies and only peri-odically (like at month-end) for others

• The usage of different valuation methods, possibly utilizing spot ex-change rates in one company and average exchange rates in anothercompany

• Company codes that have different fiscal year variants

• Variable usage of Group Currency among company codes

• A decentralized environment with decentralized responsibility for theprocess or specific G/Ls

Timing

This program should be run on a period-end basis and only once per companycode. The program can be executed in test mode as many times as needed.Some companies have requirements to run it daily. It should be run after allperiod-end posting to Accounts Payable (A/P), Accounts Receivable (A/R),and balance sheet accounts are complete and after period-end clearing is runvia F.13. It is recommended to close the period for A/P, A/R, and cash ac-counts before running F.05, the SAP R/3 valuation program.

REALIZED GAIN/LOSS POSTINGS

All foreign currency transaction postings in SAP are immediately translatedto Local Currency (and Group Currency where applicable) based on the cur-rency exchange rate from the transaction translation date or posting date (con-figuration dependent). The Transaction Currency, the Local Currency, andthe Group Currency are all entered on the original posting line item in the

Any type of cumulative revaluation postings can be run multipletimes without an indication that revaluation has been run before. Itis important to properly track when revaluation is executed.


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BSEG table in SAP. This original posting is never changed by the currencyrevaluation execution, but is used to compare the revaluated amounts calcu-lated on the key date, with the differences that are posted during revaluationexecution.

If the valuation areas are not used in the revaluation method, the valua-tion differences are posted in the BSEG table for Open Items under the fieldsBDIFF and BDIFF2. BDIFF stores the results from the last valuation run forthe line item transaction to local translation. BDIFF2 stores the results fromthe last valuation run for the line item transaction to group translation.

If valuation areas are used in the revaluation method, the valuation dif-ferences are posted in the BSIS table under the respective valuation area.

When the original posting is cleared in SAP, the realized Gain/Loss post-ing will be calculated by SAP by calculating the valuation of the originalposting using the clearing date and taking the difference from the originalposting. The revaluation that was previously run by SAP is already set up toautomatically reverse on a particular date set by the revaluation run.

STOCK TRANSFER IMPACT

The G/L account for inventory valuation is determined in the MM config-uration (OBYC/KDM). Standard pricing is rarely the same in different com-pany codes with different Local Currencies because of different currencyvalues as well as fluctuating currency exchange rates. These differences arenormally posted to either a price difference G/L account or a Gain/Loss G/Laccount.

During an intercompany posting, there is a “sending” company code, whichis normally the shipping point of the inventory. The “receiving” company codeis the company code where the inventory is being sent. The following is a briefsummary overview of the accounting/business transactions that take place:

• Sending Company Code

• Credit inventory at standard pricing

• Debit an intercompany clearing account

• Receiving Company Code

• Debits inventory

• Credits an intercompany clearing account


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TAX IMPACTS

Tax amounts on foreign currency transactions are normally calculated on thebase transaction amount. To enter a different exchange rate (options on howto set or determine it are within the configuration), you have to select this in-dicator on the global company code configuration (OBY6). Implementingthis change results in a Local Currency balance in the document. This balanceis posted to another account via configuration under Financial AccountingGlobal Settings ➞ Tax on Sales and Purchases ➞ Posting ➞ Define Accountfor Exchange Rate Difference Postings (OBYY).

This indicator is not normally set for U.S. companies. The standard is toleave this blank because issues can arise as a result of the Local Currenciesnot balancing.

BUSINESS EXAMPLE

The basis for the example is a U.S. company that has a foreign subsidiary in England. The subsidiary in England has a Local Currency in Euros (EUR). Thereporting currency of the parent company is the U.S. dollar (USD). The transac-tion currency in the example is Great Britain Pounds/UK Pound Sterling (GBP).

In Exhibits 2.1, 2.2, 2.3, and 2.4, the English company purchases officesupplies on January 5, 2005, for 50,000 GBP. Upon posting the payable inSAP, the 50,000 GBP is immediately valuated into the company’s Local Cur-rency (EUR), using the (GBP/EUR) average (M) exchange rate on January 5,2005. Additionally, Group Currency is posted (EUR/USD). This posting isone line item in SAP with three currencies available for display and reporting(Transaction, Local, Group).

The first revaluation is done on January 31, 2005 (period-end), and thesecond on February 28, 2005. During each revaluation, the payables in GBPstay the same, but the Income Statement reflects the total revaluated value bymeans of the adjustment postings resulting during revaluation execution.

Revaluation without Valuation Areas, Incremental Postings

Revaluation 10 (Transaction Currency to Local Currency): Calculated by tak-ing the difference from the current period’s valuation, less the prior period’s


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valuation for Local Currency. There is no accompanying Group Currencytranslation posting of the Local Currency valuated difference (see Exhibit 2.1).

Revaluation 30 (Local Currency to Group Currency): Calculated by tak-ing the difference form the current period’s valuation, less the prior period’svaluation for Group Currency (see Exhibit 2.1).

Revaluation without Valuation Areas, Cumulative Postings

Revaluation 10 (Transaction Currency to Local Currency): Calculated by takingthe difference from the current period’s valuation, less the original period’svaluation for Local Currency (see Exhibit 2.2).

Revaluation 30 (Local Currency to Group Currency) is calculated by takingthe original Group Currency amount, adding to it the cumulative translationamount in Group Currency (from the revaluation 10 step), and subtracting thecurrent period’s Group Currency calculated amount (see Exhibit 2.2).

Revaluation with Multiple Valuation Areas

Revaluation 10 (Transaction Currency to Local Currency): Calculated by takingthe difference from the current period’s valuation, less the prior period’s val-uation for Local Currency. The additional posting included in this method isthat SAP takes the revaluated difference in Local Currency and translates thatamount to Group Currency. This piece is required for the correct CTA calcu-lation/posting amount (see Exhibit 2.3).

Revaluation 30 (Local Currency to Group Currency): Calculated by tak-ing the Valuated Group Currency Balance ($94,068.18 USD), less the Origi-nal Group Currency ($96,055.05 USD), less the Translated Local CurrencyAdjustment ($2,061.27 USD), using period one as an example (see Exhibit2.3).

Revaluation with One Valuation Area

Revaluation 10 (Transaction Currency to Local Currency): Calculated by tak-ing the difference from the current period’s valuation, less the prior period’svaluation for Local Currency. The additional posting included in this methodis that SAP takes the revaluated difference in Local Currency and translates


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that amount to Group Currency. This piece is required for the correct CTAcalculation/posting amount (see Exhibit 2.4).

Revaluation 30 (Local Currency to Group Currency): Calculated by takingthe Valuated Group Currency Balance ($94,068.18 USD), less the TranslatedLocal Currency Adjustment ($2,061.27 USD), less the Original Group Cur-rency ($96,055.05 USD), using period one as an example (see Exhibit 2.4).


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3G/L ACCOUNT

INDICATOR IMPACT

HIGHLIGHTS

• G/L Account Indicator Settings Relevant to Foreign Currency Valuation

• Revaluation Gain/Loss Accounts in Detail

• G/L Account Sample Master Data

The G/L master data indicators can have a significant impact on the outcomeof the foreign currency revaluation and translation. The maintenance of theseG/L indicators is normally driven by the business analyst in the finance de-partment. Corporate standards are not generally available on these indicators.This section helps set the standards for these indicators by discussing what theimpact is to currency revaluation and the impact of changing the indicatorafter postings have already been made to it. These rules apply to approxi-mately 99% of all situations.

G/L ACCOUNT CURRENCY

The G/L Account Currency defaults to the company code currency when youcreate a G/L account. If the default of the company code currency is notchanged, then the G/L account can accept postings in any Transaction Cur-rency. The foreign currency transaction postings will then be translated intoLocal Currency and to Group Currency for companies managing with GroupCurrency.

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Different Currencies (Company Code and G/L AccountCurrencies Differ)

If the G/L Account Currency is changed to a currency that is not the companycode currency, then the G/L account can only accept postings in that currency.The only exception to this rule is with foreign currency exchange rate differ-ences. This is commonly used for bank accounts that are maintained in onecurrency. The foreign currency transaction postings will then be translatedinto Local Currency and to Group Currency for companies managing withGroup Currency.

Same Currencies (Company Code and G/L Account Currencies Are the Same)

The standard setting is the default of the company code or Local Currency un-less a company wants to limit postings to a particular foreign currency. For-eign currency bank accounts should be set up this way, identifying the bankG/L account in the foreign currency in which the bank account is managed.The valuation Gain/Loss G/L accounts should have the same currency astheir company codes.

Changing the Currency Field Indicator

If you attempt to change the currency from the Company Code/Local Cur-rency or a non-Local Currency to another non-Local Currency (restrictingpostings to that new currency) after postings have been made, then SAP is-sues an error message stating that the account has postings and that no changeis possible (unless the balance is the new account currency). The balance forcurrencies that are not the new account currency must be zero, because all rel-evant evaluations such as interest calculations on the account need to be re-stricted to the new account currency, and if there is a balance in anothercurrency, this is not possible.

If you attempt to change the currency from any other currency to theCompany Code/Local Currency, it is allowed regardless of the account bal-ance. This is allowed because changing it to the Company Code/Local Cur-


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rency allows any type of currency posting. Therefore, there is no negative ef-fect of this change.

It is recommended that a new G/L account be set up with the correct cur-rency setting and the postings on the old account be transferred to the new ac-count in the desired currency until the old account is a zero balance. The oldaccount should then be blocked for postings.

BALANCES IN LOCAL CURRENCY

Indicator Not Set

If the “Balances in Local Currency” indicator is blank, SAP manages theG/L account balances in Transactional Currency and Local Currency. If theindicator is selected, SAP manages the G/L account balance in Local Cur-rency only. Even if this indicator is set, you can still post foreign currencytransactions to this account and they are then translated into Local Currency.

It is recommended not to set this indicator on the following types ofaccounts:

• Reconciliation accounts (cannot be set)

• Revaluation Gain/Loss accounts

• Foreign Currency revaluation balance sheet accounts

• Accounts not identified to have it set

Indicator Set

If the indicator “Only balances in Local Currency” is set in a G/L account(whether it is an open item or line item account), then the summary tablessuch as GLT0 (G/L summary table) and ZSPLT (SPL summary table) willcontain the Local Currency amount in the Transaction Currency field. Theline item databases such as BSEG, BSIS, and BSAS are not impacted by thisindicator and will store the original Transaction Currency.

For open item accounts, the currency revaluation program reads tableBSEG, or BSIS for open items, so this indicator has no impact on foreign

G/L ACCOUNT INDICATOR IMPACT

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currency revaluation. For line item accounts (non-open item), the currencyrevaluation program reads table GLT0 for the account balance, so this indi-cator has an impact for line item accounts on revaluation.

It is recommended to set this indicator for the following types ofaccounts:

• Cash Discount Clearing accounts (managed on an open item basis)

• GR/IR Clearing accounts

Indicator Impact to Clearing

This indicator impacts the clearing process. If this indicator is set on an openitem managed account, it allows those accounts to be cleared in Local Cur-rency without regard to Transaction Currency amounts.

If this indicator is not set on an open item managed account that receivesforeign currency postings, the clearing process becomes more complex be-cause exchange rate differences will arise during the clearing process. Sepa-rate manual adjustment postings may be required in order to clear these typesof accounts.

Balances in Local Currency Field Setting Changes

Changes to this indicator once postings have been made have the same effectas the currency changes. Changes to the indicator cannot be changed unlessthe account balance is brought to zero. If you attempt to activate the indica-tor on an account with a balance, SAP will produce an error message.

EXCHANGE RATE DIFFERENCE KEY

This field is used to specify a unique set of accounts when posting Gain/Losses for non–open item managed accounts and nonreconciliation accounts.If the G/L account determination is set up within the open item managed ac-count area for this account (via OBA1), then the Exchange Rate (E/R) differ-ence key is overridden. Most companies leave this field blank. This field can


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be updated on the G/L account without any impact to revaluation as long asit is configured.

VALUATION GROUP

The Valuation Group indicator is used to group accounts together so the bal-ance can be used to determine the exchange rate type used in the currencyrevaluation. This field should be left blank on all U.S. company G/L accounts.

OPEN ITEM INDICATOR

The Open Item indicator is normally selected for G/L accounts that requireitems to be cleared. These accounts need to be cleared at month-end.

Indicator Set

It is recommended to set this indicator for the following types of accounts be-cause subsequent postings can usually be used to clear and offset the originalposting:

• Clearing accounts (bank, payroll, goods receipt/invoice receipt (GRIR),etc.)

• Cash Discount accounts

Indicator Not Set

It is recommended not to set this indicator on the following types of accountsbecause subsequent postings usually do not allow for clearing against theoriginal posting. If there is nothing to be cleared against, the original postingwill always remain uncleared.

• Bank Cash accounts

• P&L accounts


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• Reconciliation accounts (open item is inherent through its subledgerfunctionality)

• Revaluation Gain/Loss accounts

• Tax accounts

• Raw Material accounts

Open Item Indicator Field Setting Changes

Do not change the G/L account indicator once this account has been revalu-ated. The correct procedure to make a change to this indicator is to create anew G/L with the correct indicator set, and then perform transfer postingsfrom the old account to the new account. Another approach that may work inmost circumstances (but not the recommended approach) is to clear all openitems on the G/L in question (zero balance), and then change the indicator.

LINE ITEM INDICATOR

The Line Item indicator should be selected for G/L accounts managed on anopen item basis. This indicator allows you to see the line item postings in re-ports (FBL3N), rather than just the summary postings. Setting this indicatorfor all G/L accounts would add a large number of transactional postings to theSAP tables and is not recommended. It is, however, normally selected formost G/L accounts. It does not need to be nor should it be activated for G/Laccounts that provide information at the subledger level because this is al-ready at the line item level.

Indicator Not Set

It is recommended not to set this indicator on the following types of accountsbecause line item detail is available at the subledger level automatically (i.e.,

Open Item managed G/L accounts cannot be archived unless theyare managed properly and cleared accordingly.


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FLB1N; FBL3N won’t be available on the reconciliation G/L unless this in-dicator is selected, but this is unnecessary).

• Tax accounts

• Receivables Reconciliation accounts

• Payables Reconciliation accounts

• Asset Reconciliation accounts

Line Item Indicator Field Setting Changes

It is possible to change this indicator after postings have been made by firstblocking the account, changing the indicator, running program RFSEPA01(using SE38) to retroactively create line items for documents already posted,and then unblocking the account. Running this program is optional, and if notexecuted, it will only display line items after the time at which the indicatorwas activated. The indicator can be deactivated too, but will not result in thedeletion of the line item data from the tables. Line item data from the time ofchange will not be recorded. It is important to note that the correct procedureto change this indicator is to create a new G/L with the correct indicator set,then perform transfer postings from the old account to the new account.

GAIN/LOSS G/L ACCOUNT SETUP

At a minimum, gains and losses should be distinguished using two differentG/L accounts, one for gains and one for losses. Ideally, four G/L accountsshould be set to track realized gains, realized losses, unrealized gains, and un-realized losses.

The setup of the Gain/Loss G/L accounts should be similar to the indica-tor status suggested as follows:

• G/L Currency. Should be the same as the company code currency.

• Balances in Local Currency. Do not set this indicator, because the pri-mary purpose is to revalue items posted in foreign currency.

• Exchange Rate Difference Key. Do not set this field.

• Valuation Group. Do not set this field.


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• Open Item Indicator. Do not set this indicator, because these accountsare normally reversed/cleared in the next month.

• Line Item Indicator. Set this indicator in order to see the line itempostings resulting from revaluation.

BALANCE SHEET OFFSET ACCOUNTS

Except for reconciliation accounts, which cannot accept direct postings, it isnot required to set up a different balance sheet account for the currency valu-ation Gain/Loss offset postings, but it is recommended. Starting in version4.6, if you use the same balance sheet account as the offset account, you mustexclude items that have been revaluated already from the valuation runs. Thiscan be accomplished by either excluding the document type of the revaluationpostings (assuming there is a unique document type configured) or by ex-cluding any items whose Transaction Currency is zero dollars.

The setup of the balance sheet offset G/L accounts should be similar tothe indicator status suggested as follows:

• G/L Currency. Should be the same as the Company Code Currency.

• Balances in Local Currency. Do not set this indicator, because the pri-mary purpose is to revalue items posted in foreign currency.

• Exchange Rate Difference Key. Do not set this field.

• Valuation Group. Do not set this field.

• Open Item Indicator. Set this indicator.

• Line Item Indicator. Set this indicator in order to see the line itempostings resulting from revaluation.


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4REVALUATION WITHOUT

VALUATION AREAS

HIGHLIGHTS

• Cumulative Revaluation “Type 10”: Period 1 Setup and Execution




• Incremental Revaluation “Type 10”: Period 1 Setup and Execution




This method of revaluation revaluates the G/L accounts without using valua-tion areas and is currently the most common of the methods for revaluation.There are substantial differences in how the Group Currency is calculated be-tween the incremental calculation and the cumulative calculation.

In both the incremental calculation and the cumulative calculation forrevaluation 10 (Transaction Currency to Local Currency), the valuationposted is simply the difference of the Local Currency between periods. In-cremental calculation takes the difference between the current period and theprior period, whereas the cumulative calculation takes the difference betweenthe current period and the original posting.

Revaluation 30 (Local Currency to Group Currency) for the incrementalmethod is simply the difference of the Group Currency for the current periodand the Group Currency for the prior period.

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Revaluation 30 (Local Currency to Group Currency) for the cumulativemethod is the difference of the EUR/USD exchange rates for the current pe-riod and the original period, times the original Local Currency posting inEUR to obtain USD.

These methods are not FASB 52 compliant because they do not translatethe Local Currency Gain/Loss to Group Currency.

SAP provides a means to execute foreign currency revaluation on spe-cific G/L accounts managed in foreign currencies. Exhibit 4.1 describes themenu path and transaction code, and Exhibit 4.2 shows it on the menu. Trans-action code F.05 allows the revaluation of one or more accounts at the sametime. The following steps occur with currency revaluation execution:


Exhibit 4.1 Access Sequence

Transaction is Accessed via:

Via Menus Accounting → Financial Accounting → GeneralLedger → Periodic Processing → Closing → Valuate→ Foreign Currency Valuation (Exhibit 4.2)

Via Transaction Code F.05

Exhibit 4.2 Menu Path© SAP AG, 2006

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Step 1. Each G/L account’s line item selected is revalued using the ex-change rate of the key evaluation date.

Step 2. A posting is generated to the appropriate unrealized Gain/Lossaccount and balance statement adjustment account.

Step 3. Postings can be incremental with no reversals posted or cumula-tive with reversals posted.

Currency revaluation has various configurations that are required:

• Exchange rate types are set up.

• Valuation methods are set up (OB59).

• Document types are set up (OBA7).

• Exchange rates are entered for each currency (OC41).

• Account determination has been defined (OBA1).

• Posting keys are assigned for adjustment postings.

CUMULATIVE REVALUATION “TYPE 10”:PERIOD 1 SETUP AND EXECUTION 1/31/2005

In this section, the foreign currency account balances will be revaluated byconverting the Transaction Currency posting (GBP) to Local Currency (EUR)using the exchange rate for the original posting, and the Transaction Currencyposting (GBP) to Local Currency (EUR) using the exchange rate for the eval-uation key date. The difference that results from the exchange rate fluctua-tions on the date of revaluation will be posted in SAP.

Header Data

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REVALUATION WITHOUT VALUATION AREAS

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• Company Code. Select the company code or company codes that areto be revaluated. Some companies prefer to centralize this function,whereas other companies decentralize it. Either way, you can run it forone or more company codes at the same time. It depends on how youwant to analyze the output.

• Evaluation Key Date. The evaluation key date is used to determine thedate of the currency exchange rates used in the revaluation. SAP willlook for the exchange rate that falls on the key date entered. If one doesnot exist for that specific date, it will look for the exchange rate for theclosest date prior to the date entered as the evaluation key date. Theevaluation key date should be the last day of the period.

The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (period 13 through pe-riod 16 are considered if the key date is within periods 1 through 12).

• Valuation Method. Valuation method is the key that determines a for-eign currency valuation method/approach used when carrying out theforeign currency revaluation. The most important field read from thevaluation method is the type of exchange rate used (average or spot).Refer to the common configuration area to read more information spe-cific to this key.

• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. First local cur-rency type defined for valuation defines the Currency Type for Trans-actional Currency to Local Currency valuation (“Type 10” in theseexamples).

When you run this for multiple company codes, the G/L accountsthat are selected for revaluation are run for all companies selected.For example, a specific G/L account (e.g., 2050) might exist in allcompany codes, but revaluation runs might only be desired in oneor a select number of company codes. If company codes have dif-ferent G/Ls that require revaluation, it might be best to run thecompany codes individually.


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Postings Tab

© SAP AG, 2006

• Balance Sheet Preparation Valuation. This parameter can only beused for valuation runs that do not use valuation areas. This indicatordoes not have an effect on non–open item accounts; it only affects openitem accounts.

For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-versal postings will occur and valuation will be incremental. Refer toSAP Note No. 87538 in the References section at the end of the book.Most companies that run revaluation via this method (e.g., not usingvaluation areas) do not reverse postings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Val-uation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the balance sheet preparation val-uation indicator and select the reverse postings indicator at the bottom.

• Create Postings. Leave this indicator blank to run the valuation in testmode. Select the indicator to make the postings in Finance (FI). Whenselected, the postings can either be executed immediately in the fore-ground, in the background, or a batch input session can be specified.

• Batch Input Session Name. If you enter a name here, a batch inputsession with that name will be created. Transaction SM35 must be usedto process the batch session. The postings will not be made until thebatch session is processed. If you do not enter a name here, the postingswill be made immediately.


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• Document Date. The document date of the unrealized postings can bespecified here or SAP will default to the valuation key date.

• Posting Date. The posting date of the unrealized postings can be spec-ified here or SAP will default to the valuation key date.

• Posting Period. Posting period in which the valuation postings aregenerated. The number entered should correspond to the period that in-cludes the posting date or valuation key date.

• Reversal Posting Date. The posting date of the reversal postings canbe specified here; otherwise, SAP will default to the next day. This isnormally the first day of the next period or the next day if running val-uation daily. This is for non–open item accounts only.

• Reversal Posting Period. This is the posting period in which the val-uation postings are generated. This must correspond to the posting date.This is for non–open item accounts only.

• Reverse Postings. This indicator affects the valuation of non–openitems only. If not selected, the G/L balances for non–open item ac-counts will not be reversed. If selected, they will be reversed in full.

Selections Tab

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• Valuate G/L Account Open Items. Select this indicator in com-bination with identifying the specific open item G/L accounts to bevaluated.

• Valuate G/L Account Balances. Select this indicator in combinationwith identifying the specific G/L balance accounts to be valuated.

• G/L Account. Identify the specific open item G/L account(s) that willbe revaluated. These same G/L accounts will appear in the G/L balancetab, and even if the “Valuate G/L Account Open Items” indicator is se-lected, the accounts identified in both the open items and G/L balancetab will be valuated based on their G/L account definition as open itemor line item. If a range of G/L accounts that include both open item andnon–open item accounts is identified, and only the “Valuate G/L Ac-count Open Items” indicator is selected, then only the G/L accounts inthe range that are open item will be revaluated.

• No GR/IR Accounts. If selected, no GR/IR valuation will occur.GR/IR should be revaluated.

• Evaluate GR/IR Accounts. If selected, open items with a goods re-ceipt (MIGO) will be valuated in the GR/IR account. The PurchaseOrder Currency is then valuated. The valuation is only completed if thegoods receipt has occurred, because this is when the first financial post-ing occurs. The GR/IR account is an open item account, and postingswill automatically be reversed. Revaluation occurs based on the Pur-chase Order Currency. Refer to SAP Note No. 441333 in the Refer-ences for more information.

• GR/IR with FI Data. If you select this indicator, revaluation will occuron all items in the GR/IR account. U.S. clients may choose to use thisfield as opposed to the previous field because this gives more control tothe person running the revaluation.

• GR/IR Delivery Costs. Specify accounts for GR/IR transaction costpostings. Transactions with debit balances (invoices without goods)should not be valuated. The vendor invoice will be valuated. Goods de-livered but not invoiced will be valuated with this indicator setting.

• Valuate P&L Accounts. Select to valuate P&L accounts. This is notnormally selected unless fixed asset depreciation is being revaluated.Do not reverse P&L postings.


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• Valuate Period Balance Only. This is not normally selected unlessrunning revaluation on P&L accounts. Selecting this indicator valuatesthe period balance and not the cumulative balance.

• Exchange Rate Difference Key. If exchange rate difference keys areutilized on G/L account master data for non–open item accounts, thisfield can be used to uniquely identify the valuation for specific ex-change rate keys.

• Business Area. Revaluation can be run for specific business areas (ifbusiness areas are used).

• Valuate Vendor Open Items. To valuate vendor (payables) open items,select this indicator and select the appropriate vendors or range of ven-dors in the next field.

• Vendor. Select the vendor(s) or range of vendors to valuate along withthe previous indicator “Value Vendor Open Items.”

• Valuate Customer Open Items. To valuate customer (receivable)open items, select this indicator and select the appropriate customers orrange of customers in the next field.

• Customer. Select the customer(s) or range of customers to valuate,along with the previous indicator “Valuate Customer Open Items.”

• Reconciliation Account. This field can be used as an alternative to list-ing the vendors or customers. The vendor or customer reconciliationaccounts are listed here. If used, only vendors (or customers) assignedto this G/L reconciliation account(s) will be valuated.

• Document Number. This is used to select one or more specific docu-ments for valuation. This is not normally used for production runs butis useful in testing valuation so that valuation and postings are kept toa specific document test.

• Currency. Valuation runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this. Leaving this fieldblank will select all open items for valuation for any currency.

• SL Extra. Split ledger (SL) functionality in SAP R/3 v4.7 allows youto distribute valuation differences to profit centers or business areasbased on how the split ledger ZZPLIT is set up.


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Other Tab

© SAP AG, 2006

• List Variant. The list variant is useful in displaying all of the balancesSAP uses to calculate the valuation postings.

• Additional Header. A report header/description can be entered here,and it will be entered on the valuation report.

• Alternative Account Number. If selected, the alternative account num-ber defined on the G/L account master record is used. This is normallyused if a country chart of accounts is maintained in the company codesselected. Remember that the financial statements will need to be up-dated to include the alternative accounts. Normally, this is not selected.

• File Name for Extract. Enter a file name if an extract is desired. Oth-erwise, leave this field blank.

• Target Co-code. A cross-company code can be entered for the valua-tion postings. Normally, this is left blank.

FASB 52 Tab

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• Translate Valuation Difference. Select this indicator to execute thetranslation using valuation areas. This is not used without valuation areas.

• Exchange Rate Type for Translation. Select the appropriate ex-change rate type. This is not used without valuation areas.

• Save in Valuation Area. Select a valuation area to store the valuationin this field. This is not used without valuation areas.

• Use for Translation. This is not used for revaluation “Type 10” (Trans-action to Local Currency). This is used for the second step, revaluation 30(Transaction to Group Currency). This is not used without valuation areas.

• Translation of Currency Type or Valuation Area. This is not usedfor revaluation “Type 10” (Transaction to Local Currency). This isused for the second step, revaluation 30 (Transaction to Group Cur-rency). This is not used without valuation areas.


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• Amount in FC. This is the document currency (50,000 GBP in thisexample).

• Amount in Local Currency. This is the open item cumulative balancein Local Currency (70,525.00 EUR in this example).

• Amount Valuated. This is the Transaction Currency (50,000 GBP)translated into Local Currency (72,105.00 EUR) on the key date.

• Old Difference. This is the cumulative valuation adjustment that re-sulted from the prior valuation.

• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount, Transaction Currency translated intoEUR on the key date (72,105.00 EUR), less the Local Currency amountin EUR (70,525.00 EUR).

SAP Execution: Postings

© SAP AG, 2006

• Amount in Local Currency. This is the difference between the newvaluated amount (72,105.00 EUR) and the old valuated amount(70,525.00 EUR).

• Local Currency 2 Amount. This is the Local Currency (EUR) reval-uated difference translated into Group Currency (USD). This is not ex-ecuted or posted with this process method.

• Process Batch Session. If a batch session was created, run transactionSM35 to process the batch session. Select “Process errors only,” andExecute.


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SAP Execution: Validation

In order to validate the results, select a few G/L accounts to analyze. Use thefollowing steps to compare the revaluation from Transaction to Local Currency:

Step 1. Run SAP transaction code FBL3N for the open items on the keydate for the same G/L accounts selected, or select a few to re-view. Exclude the amounts (Transaction Currency) where theyare zero so you do not pick up adjustment amounts. Take theTransaction Currency and convert it to the Local Currency usingthe exchange rate for the key date being used.

Step 2. Take the original Local Currency (prior period) and the LocalCurrency amount calculated by the previous step and comparethe SAP calculation, Exhibit 4.3.


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In this section, the foreign currency account balances will be revaluated bytaking the difference of the EUR/USD exchange rate for the current periodand the original period, times the original Local Currency posting. The dif-ference that results from the exchange rate fluctuations on the date of revalu-ation will be posted in SAP.

Header Information

© SAP AG, 2006

• Company Code. Select the company code or codes that are to be reval-uated. Some companies prefer to centralize this function, whereas othersdecentralize it. Either way, you can run it for one or more company codesat the same time. It depends on how you want to analyze the output.

• Evaluation Key Date. The evaluation key date is used to determine thedate of the Currency Exchange Rates used in the revaluation. SAP willlook for the exchange rate that falls on the key date entered. If onedoesn’t exist for that specific date, it will look for the exchange rate for

When you run this for multiple company codes, the G/L accountsthat are selected for revaluation are run for all companies selected.For example, a specific G/L account (e.g., 2050) might exist in allcompany codes, but revaluation runs might only be desired forone or a select number of company codes. If company codes havedifferent G/Ls that require revaluation, it might be best to run thecompany codes individually.


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the closest date prior to the date entered as the evaluation key date. Theevaluation key date should be the last day of the period.

The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (period 13 through period16 are considered if the key date is within periods 1 through period 12).


• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. Second Local Cur-rency type defined for valuation defines the Currency Type for LocalCurrency to Group Currency valuation (“Type 30” in these examples).

Postings Tab

© SAP AG, 2006


For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-versal postings will occur and valuation will be incremental. Refer to


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SAP Note No. 87538 in the References. Most companies that run reval-uation via this method (e.g., not using valuation areas) do not reversepostings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Val-uation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the balance sheet prepara-tion valuation indicator and select the reverse postings indicator at thebottom.

• Create Postings. Leave this indicator blank to run the valuation in testmode. Select the indicator to make the postings in FI. When selected,the postings can either be executed immediately in the foreground, inthe background, or a batch input session can be specified.









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Selections Tab

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• Valuate G/L Account Open Items. Select this indicator in com-bination with identifying the specific open item G/L accounts to bevaluated.


• G/L Account. Identify the specific open item G/L account(s) that willbe revaluated. These same G/L accounts will appear in the G/L balancetab, and even if the “Valuate G/L Account Open Items” indicator is se-lected, the accounts identified in both the open items and G/L balancetab will be valuated based on their G/L account definition as open itemor line item. If a range of G/L accounts that include both open item andnon–open item accounts is identified, and only the “Valuate G/L Ac-count Open Items” is selected, then only the G/L accounts in the rangethat are open item will be revaluated.



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• Valuate Vendor Open Items. To valuate vendor (payables) openitems, select this indicator and select the appropriate vendors or rangeof vendors in the next field.




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• Currency. Valuations runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this indicator. Leaving thisfield blank will select all open items for valuation for any currency.

• SL Extra. Split ledger functionality in SAP R/3 v4.7 allows you to dis-tribute valuation differences to profit centers or business areas based onhow the split ledger ZZPLIT is set up.

Other Tab

© SAP AG, 2006



• Alternative Account Number. If selected, the alternative account num-ber defined on the G/L account master record is used. This is normallyused if a country chart of accounts is maintained in the company codes


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selected. Remember that the financial statements will need to be up-dated to include the alternative accounts. Normally, this is not selected.



FASB 52 Tab

© SAP AG, 2006

• Translate Valuation Difference. Select this indicator to execute thetranslation using valuation areas. This is not used without valuationareas.

• Exchange Rate Type for Translation. Select the appropriate ex-change rate type. This is not used without valuation areas.

• Save in Valuation Area. Select a valuation area to store the valuationin this field. This is not used without valuation areas.

• Use for Translation. This is not used for revaluation “Type 10” (Trans-action to Local Currency). This is used for the second step, revaluation 30(Transaction to Group Currency). This is not used without valuation areas.

• Translation of Currency Type or Valuation Area. This is not usedfor revaluation “Type 10” (Transaction to Local Currency). This isused for the second step, revaluation 30 (Transaction to Group Cur-rency). This is not used without valuation areas.


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• Amount in FC. For group valuation, this is the Local Currency amountin EUR (open item cumulative balance) from the valuation “Type 10”calculation (70,525 EUR in this example).

• Amount in Group Currency. This is the open item cumulative bal-ance in Group Currency ($96,055.05 USD in this example)

• Amount Valuated. This is the Group Currency on the key date($94,068.18 USD), less the Local Currency valuation (1,580 EUR),translated into Group Currency $2,061.27 (USD) on key date($92,006.92 USD in this example).

• Old Difference. This is the cumulative valuation adjustment that re-sulted from the most recent valuation.

• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount ($92,006.92 USD) less the originalGroup Currency amount ($96,055.05 USD).

SAP Execution: Posting

© SAP AG, 2006

• Local Currency Amount. This is not relevant in this valuation method“Type 30.”

• Local Currency 2 Amount. This is the current amount valuated($92,006.92 USD) less the original Group Currency amount ($96,055.05USD).



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In order to validate the results, select a few G/L accounts to analyze. Use thefollowing steps to compare the revaluation from Transaction to Local Cur-rency:

• Run SAP transaction code FBL3N for the open items on the key datefor the same G/L accounts selected, or select a few to review. Excludethe amounts (Transaction Currency) where they are zero so you do notpick up adjustment amounts. Take the Transaction Currency and con-vert it to the Local Currency using the exchange rate for the key datebeing used.

• Take the original Local Currency (prior period) and the Local Cur-rency amount calculated by the previous step and compare the SAP cal-culation, Exhibit 4.4.


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In this section, the foreign currency account balances will be revaluated fromTransactional Currency (GBP) to Local Currency (EUR). The difference thatresults from the exchange rate fluctuations on the date of revaluation will beposted in SAP.

Header Data

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• Amount in Local Currency. This is the open item cumulative balancein Local Currency (70,525 EUR in this example).

• Amount Valuated. This is the Transaction Currency (50,000 GBP)translated into Local Currency (72,610 EUR) on the key date.


• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount, translated into EUR on the key date(72,610 EUR), less the Local Currency amount in EUR (70,525 EUR).


© SAP AG, 2006

• Amount in Local Currency. This is the difference between the newvaluated amount (72,610 EUR) and the original valuated amount(70,525 EUR).

• Local Currency 2 Amount. This is the Local Currency (EUR) reval-uated difference translated into Group Currency (USD).



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In order to validate the results, select a few G/L accounts to analyze. Use the fol-lowing steps to compare the revaluation from Transaction to Local Currency:




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Am

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2/28

-rev

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0 50

,000

.00

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085.

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EU

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Exhi

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4.5

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Header Information

© SAP AG, 2006

CUMULATIVE REVALUATION “TYPE 30”:PERIOD 2 EXECUTION 2/28/2005

In this section, the foreign currency account balances will be revaluated byconverting the original posting value in Local Currency (EUR) with the dif-ference in exchange rates from period 2 and period 1 for EUR/USD. The dif-ference that results from the exchange rate fluctuations on the date ofrevaluation will be posted in SAP.

SAP Execution: Execution

© SAP AG, 2006


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• Amount in Group Currency. This is the open item cumulative bal-ance in Group Currency ($96,055.05 USD in this example).

• Amount Valuated. This is the Group Currency on the key date($96,193.73 USD), less the Local Currency valuation (2,085 EUR),translated into Group Currency $2,762.21 (USD) on key date ($93,431.52USD in this example).


• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount ($93,431.52 USD) less the originalGroup Currency amount ($96,055.05 USD).


© SAP AG, 2006


• Local Currency 2 Amount. This is the current amount valuated($93,431.52 USD) less the original Group Currency amount ($96,055.05USD).



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P 72

,105

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,068

.18

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1.44

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1.30

460

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50

,000

.00

GB

P 72

,610

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R96

,193

.73

US

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R93

,431

.52

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D2/2

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EU

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,623

.53

US

D

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INCREMENTAL REVALUATION “TYPE 10”:PERIOD 1 SETUP AND EXECUTION 1/31/2005


Header Data

© SAP AG, 2006

Postings Tab

© SAP AG, 2006


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• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount, Transaction Currency translated intoEUR on the key date (72,105 EUR), less the original Local Currencyamount in EUR (70,525 EUR).


© SAP AG, 2006

• Amount in Local Currency. This is the difference between the newvaluated amount (72,105 EUR) and the previous valuated amount(70,525 EUR).




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,105

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R94

,068

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DSp

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1.44

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460

28

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,000

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P 72

,610

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R96

,193

.73

US

DSp

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In this section, the foreign currency account balances will be revaluated byconverting the Local Currency posting (EUR) to Local Currency 2/GroupCurrency (USD) using the exchange rate for the original posting, and theLocal Currency posting (EUR) to Local Currency 2/Group Currency (USD)using the exchange rate for period 1. The difference that results from the ex-change rate fluctuations on the date of revaluation will be posted in SAP.

Header Information

© SAP AG, 2006

Postings Tab

© SAP AG, 2006


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• Amount Valuated. This is the Group Currency on the key date($94,068.18 USD).


• New Difference. This is the amount valuated ($94,068.18 USD) lessthe amount in Group Currency ($96,055.05 USD), $1,986.87 USD inthis example.


© SAP AG, 2006


• Local Currency 2 Amount. This is the current amount valuated($94,068.18 USD) less the prior period Group Currency amount($96,055.05 USD).



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,055

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,105

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,068

.18

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460

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,000

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P 72

,610

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,193

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US

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In this section, the foreign currency account balances will be revaluated byconverting the Transaction Currency posting (GBP) to Local Currency (EUR)using the exchange rate for period 1, and the Transaction Currency posting(GBP) to Local Currency (EUR) using the exchange rate for period 2. Thedifference that results from the exchange rate fluctuations on the date ofrevaluation will be posted in SAP.

Header Data

© SAP AG, 2006

Postings Tab

© SAP AG, 2006


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• Amount in FC. This is the document currency (50,000 GBP in this example).




• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount, Transaction Currency translated intoEUR on the key date (72,610 EUR), less the previous Local Currencyamount in EUR (72,105 EUR).


© SAP AG, 2006

• Amount in Local Currency. This is the difference between the newvaluated amount (72,610 EUR) and the previous valuated amount(72,105 EUR).




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P/E

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460

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50

,000

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,610

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In this section, the foreign currency account balances will be revaluated byconverting the Local Currency posting (EUR) to Local Currency 2/GroupCurrency (USD) using the exchange rate for period 1, and the Local Currencyposting (EUR) to Local Currency 2/Group Currency (USD) using the ex-change rate for period 2. The difference that results from the exchange ratefluctuations on the date of revaluation will be posted in SAP.

Header Information

© SAP AG, 2006

Postings Tab

© SAP AG, 2006


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• Amount Valuated. This is the Group Currency on the key date($96,193.73 USD).

• Old Difference. This is the cumulative valuation adjustment that re-sulted from the most recent valuation (–$1,986.87 USD in this example).

• New Difference. This is the amount valuated ($96,193.73 USD) lessthe amount in Group Currency ($96,055.05 USD); $138.68 USD in thisexample.


© SAP AG, 2006


• Local Currency 2 Amount. This is the current amount valuated($96,193.73 USD) less the prior period Group Currency amount($94,068.18 USD).



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-Feb

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,000

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5REVALUATION WITH FULL

VALUATION AREAS

HIGHLIGHTS

• Revaluation “Type 10”: Period 1 Setup and Execution




• Unique Configuration

This method of revaluation revaluates the G/L accounts using only valuationareas. The end result is a revaluated balance from Transaction Currency toLocal Currency with the Gain/Loss posting as well as with translation and as-sociated CTA posting. Refer to SAP Note No. 448306 in the References atthe end of the book.

Additionally, postings are done in full each time revaluation is run. Re-versals are done in full before each revaluation run. Incremental postings arenot possible with this method of execution.

This method does provide for translation, but it also requires that revalu-ation runs are executed in full, and reversed in full before each execution (noincremental postings), which can lead to long run times. SAP address this inSAP Note No. 692693 (see the References).

The calculations for this methodology are similar to method 3 (revaluationwith one valuation area), but the benefits for method 3 are that only one valu-ation area is required, and the additional account assignment table does not

05_4619.qxp 2/6/06 4:23 PM Page 77

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have to be maintained. The original account assignment table (V-T030H) canstill be used.

It is also much more difficult to configure the table required for support ofthe valuation area account assignments (T030HB). Additionally, SAP cur-rently has no indicator that lets you know you have already run the revaluationfor a period using valuation areas. Therefore, revaluation can be mistakenlyrun multiple times. This method of execution is not commonly run.

SAP provides a means to execute foreign currency revaluation on spe-cific G/L accounts managed in foreign currencies. Exhibit 5.1 describes themenu path and transaction code, and Exhibit 5.2 shows it on the menu. Trans-action code F.05 allows the revaluation of one or more accounts at the sametime. The following steps occur with currency revaluation execution:





Via TransactionCode F.05


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1. Each G/L account’s line item selected is revalued using the exchangerate of the key evaluation date.

2. A posting is generated to the appropriate unrealized Gain/Loss ac-count and balance statement adjustment account.

3. A reversal posting is generated in total for the next day (unless youspecify another date to reverse the postings to the unrealized Gain/Loss).








REVALUATION “TYPE 10”:PERIOD 1 SETUP AND EXECUTION 1/31/2005


Header Data

© SAP AG, 2006

REVALUATION WITH FULL VALUATION AREAS

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The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (periods 13 to 16 areconsidered if the key date is within period 12).


• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. First Local Cur-rency type for valuation defines the currency type for TransactionalCurrency to Local Currency valuation (“type 10” in these examples).

When you run this for multiple company codes, the G/L accountsthat are selected for revaluation are run for all companies selected.For example, a specific G/L account (e.g., 2050) might exist in allcompany codes, but revaluation runs might only be desired in oneor a select number of company codes. If company codes have dif-ferent G/Ls that require revaluation, it might be best to run thecompany codes separately.


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Postings Tab

© SAP AG, 2006


For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-versal postings will occur and valuation will be incremental. Refer toSAP Note No. 87538 in the References. Most companies that run reval-uation via this method (e.g., not using valuation areas) do not reversepostings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Valu-ation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the “balance sheet preparation val-uation indicator” and select the “reverse postings” indicator at the bottom.




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Selections Tab

© SAP AG, 2006


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• Valuate G/L Account Open Items. Select this indicator in combina-tion with identifying the specific open item G/L accounts to be valuated.









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• Currency. Valuation runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this information. Leavingthis field blank will select all open items for valuation for any currency.



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Other Tab

© SAP AG, 2006



• Alternative Account Number. If selected, the alternative accountnumber defined on the G/L account master record is used. This is nor-mally used if a country chart of accounts is maintained in the companycodes selected. Remember that the financial statements will need to beupdated to include the alternative accounts. Normally, this is not selected.




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FASB 52 Tab

© SAP AG, 2006

In this first step, foreign currency Transaction Currency items are valuatedand posted to P&L accounts in the Local Currency. Additionally, the valua-tion difference is translated into Group Currency and posted. The differencethat is translated into Group Currency is stored in the valuation area FX.

• Translate Valuation Difference. Select this indicator to execute thetranslation using valuation areas.

• Exchange Rate Type for Translation. Select the appropriate ex-change rate type.

• Save in Valuation Area. Select this indicator to store the valuation invaluation area FX.

• Use for Translation. This is not used for revaluation “type 10” (Trans-action to Local Currency). This is used for the second step, revaluation30 (Transaction to Group Currency).

• Translation of Currency Type or Valuation Area. This is not usedfor revaluation “type 10” (Transaction to Local Currency). This is usedfor the second step, revaluation 30 (Transaction to Group Currency).


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• Amount Valuated. This is the Transaction Currency (50,000 GBP)translated into Local Currency (72,105 EUR in this example) on thekey date.


• New Difference. This is the current cumulative valuation adjustment,which is the valuated amount, Transaction Currency translated intoEUR on the key date (72,105 EUR), less the Local Currency amount inEUR (70,525 EUR).


© SAP AG, 2006

• Amount in Local Currency. This is the difference between the oldvaluated amount and the new valuated amount.

• Local Currency 2 Amount. This is the Local Currency (1,580 EUR)revaluated difference translated into Group Currency ($2,061.27 USD).



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In order to validate the results, select a few G/L accounts to analyze. Use thefollowing steps to compare the revaluation from Transaction to Local Cur-rency:

Step 1. Run FBL3N for the open items on the key date for the same G/Laccounts selected, or select a few to review. Exclude the amounts(Transaction Currency) where they are zero so you do not pickup adjustment amounts. Take the Transaction Currency and con-vert it to the Local Currency using the exchange rate for the keydate being used.



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Exhi

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REVALUATION “TYPE 30”: PERIOD 1 SETUP AND EXECUTION 1/31/2005

In this section, the cumulative balance is calculated by taking the revaluatedamount from the revaluation “Type 10” calculation, translated into GroupCurrency, and adding the original Group Currency translated balance. Thedifference between this amount and Group Currency translated on the keydate is the cumulative translation adjustment posted in SAP.

Header Data

© SAP AG, 2006


• Evaluation Key Date. The evaluation key date is used to determine thedate of the currency exchange rates used in the revaluation. SAP willlook for the exchange rate that falls on the key date entered. If one does

When you run this for multiple company codes, the G/L accountsthat are selected for revaluation are run for all companies selected.For example, a specific G/L account (e.g., 2050) might exist in allcompany codes, but revaluation runs might only be desired in oneor a select number of company codes. If company codes have dif-ferent G/Ls that require revaluation, it might be best to run thecompany codes individually.


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not exist for that specific date, it will look for the exchange rate for theclosest date prior to the date entered as the evaluation key date. Theevaluation key date should be the last day of the period.

The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (periods 13 through 16are considered if the key date is within period 12).

• Valuation Method. Valuation method is the key that determines a for-eign currency valuation method/approach used when carrying out theforeign currency revaluation. The most important field read from thevaluation method is the type of exchange rate used (average or spot).Refer to the common configuration area to read more information thatis specific to this key.

• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. Second Local Cur-rency type is defined for Local Currency to Global Currency valuation(“Type 30” in these examples).

Postings Tab

© SAP AG, 2006


For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-


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versal postings will occur and valuation will be incremental. Refer toSAP Note No. 87538 in the References. Most companies that run reval-uation via this method (e.g., not using valuation areas) do not reversepostings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Val-uation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the “balance sheet preparationvaluation” indicator and select the “reverse postings” indicator at the bottom.










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Selections Tab

© SAP AG, 2006





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• Currency. Valuations runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this information. Leav-ing this field blank will select all open items for valuation for any currency.


Other Tab

© SAP AG, 2006



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• Alternative Account Number. If selected, the alternative accountnumber defined on the G/L account master record is used. This is nor-mally used if a country chart of accounts is maintained in the companycodes selected. Remember that the financial statements will need to be updated to include the alternative accounts. Normally, this is not selected.



FASB 52 Tab

In this second step, the valuated Local Currency is translated into GroupCurrency.

© SAP AG, 2006

• Translate Valuation Difference. Not used for revaluation “type 30”(transaction to group). This is used in the first step, revaluation 10(Transaction to Local Currency).



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• Save in Valuation Area. Not used for revaluation “type 30” (Transac-tion to Group Currency). This is used in the first step, revaluation 10(Transaction to Local Currency).

• Use for Translation. Select this to execute the second step of the trans-lation to Group Currency using valuation areas.

• Translation of Currency Type or Valuation Area. Select this indi-cator to store the valuation in valuation area RE.

The exchange rate type for translation must be selected with thesame exchange rate used in the “Type 10” revaluation, even dur-ing the second step. If this is not done, the revaluation calculationswill not be correct.


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• Amount in FC. For group valuation, this is the Local Currency amountin EUR (open item cumulative balance) from the valuation 10 calcula-tion (72,105 EUR in this example).

• Amount in Group Currency. This is the open item cumulative bal-ance in Group Currency ($98,116.32 USD in this example). The origi-nal Group Currency balance ($96,055.05 USD) is added to the GroupCurrency translated adjustment amount ($2,061.27 USD) from “Type10” revaluation.

• Amount Valuated. This is the Transaction Currency (72,105 EUR)translated into Group Currency (94,068.18 USD) on key date.


• New Difference. This is the current cumulative valuation adjustment,valuated Group Currency ($94,068.18 USD), less the current period cu-mulative balance ($98,116.32 USD). The cumulative balance is theoriginal posting in USD plus the translated amount in USD.


© SAP AG, 2006

• Local Currency 2 Amount. This is not relevant in this valuationmethod “Type 30.”

• Local Currency 2 Amount. This is the current cumulative valuationadjustment, which is the Group Currency for the current period($94,068.18 USD), less the cumulative balance ($98,116.32 USD inthis example).


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• Process Batch Session. Run SM35 to process the batch session. Select“Process errors only,” and Execute.


In order to validate the results, select a few G/L accounts to analyze. Use thefollowing steps to compare the revaluation from Local Currency to GlobalCurrency:

Step 1. Run SAP transaction code FBL3N for the open items on the keydate for the same G/L accounts selected, or select a few to re-view. Exclude the amounts (Transaction Currency) where theyare zero so you do not pick up adjustment amounts. Take theTransaction Currency and convert it to the Local Currency usingthe exchange rate for the key date being used. Take the resultingvaluated Local Currency amount and convert it to the GlobalCurrency using the exchange rate for the key date being used.

Step 2. Take the original Global Currency (prior period) and the GlobalCurrency amount calculated by the previous step and comparethe SAP calculation, Exhibit 5.4.


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Exhi

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RE

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,055

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1.36

200

31

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50,0

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72,1

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50,0

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72,6

10.0

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96,1

93.7

3 U

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22

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580.

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27

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Header Data

© SAP AG, 2006


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• Amount Valuated. This is the Transaction Currency (50,000 GBP)translated into Local Currency (72,610 EUR in this example) on thekey date.




© SAP AG, 2006





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Step 1. Run FBL3N for the open items on the key date for the same G/Laccounts selected, or select a few to review. Exclude the amounts(Transaction Currency) where they are zero so you do not pickup adjustment amounts. Take the Transaction Currency and con-vert it to the Local Currency, using the exchange rate for the keydate being used.



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Exhi

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DM

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,000

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,610

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Header Data

© SAP AG, 2006


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• Amount in Group Currency. This is the open item cumulative bal-ance in Group Currency ($98,817.26 USD in this example). The origi-nal Group Currency balance ($96,055.05 USD) is added to the GroupCurrency translated adjustment amount ($2,762.21 USD) from “Type10” revaluation.

• Amount Valuated. This is the Transaction Currency (72,610 EUR)translated into Group Currency (96,193.73 USD) on key date.


• New Difference. This is the current cumulative valuation adjustment,valuated Group Currency ($96,193.73 USD), less the current period cu-mulative balance ($98,817.26 USD). The cumulative balance is theoriginal posting in USD plus the translated amount in USD.


© SAP AG, 2006

• Local Currency 2 Amount. This is not relevant in this valuationmethod “Type 30.”

• Local Currency 2 Amount. This is the current cumulative valuationadjustment, which is the Group Currency for the current period($96,193.73 USD), less the cumulative balance ($98,817.26 USD inthis example).


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In order to validate the results, select a few G/L accounts to analyze. Use thefollowing steps to compare the revaluation from Local Currency to GlobalCurrency:

Step 1. Run SAP transaction FBL3N for the open items on the key datefor the same G/L accounts selected, or select a few to review. Ex-clude the amounts (Transaction Currency) where they are zero soyou do not pick up adjustment amounts. Take the TransactionCurrency and convert it to the Local Currency, using the ex-change rate for the key date being used. Take the resulting valu-ated Local Currency amount and convert it to the GlobalCurrency, using the exchange rate for the key date being used.

Step 2. Take the original Global Currency (prior period) and the GlobalCurrency amount calculated by the previous step and comparethe SAP calculation, Exhibit 5.6.


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55.0

5 U

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UNIQUE CONFIGURATION

Three tables can be configured for foreign currency revaluation. Only TableV-T030HB (see Exhibit 5.9) is relevant to this chapter “foreign currencyrevaluation with valuation areas.” If it is not configured and revaluation isrun, SAP will generate a batch input session to complete the incorrect post-ings. If it is a realized Gain/Loss posting attempted by SAP and the configu-ration does not exist, the result will be a hard error.

Table V-T030HB is used to configure the account assignments whenusing revaluation areas. Note that if the one valuation area method is used, theprevious table V-T030H can still be used as the table for account assignments.

DEFINE DEPRECIATION (VALUATION) AREAS

Exhibit 5.7 describes the menu path and transaction code, and Exhibit 5.8shows it on the menu. Valuation areas are required with this valuationmethod. Valuation areas store the translated amounts in table BSIS. Valuationareas are freely definable, as in Exhibit 5.9.




Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → Closing → Valuate→ Foreign Currency Valuation → DefineDepreciation Areas (Exhibit 5.8)

Via TransactionCode SPRO

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FOREIGN CURRENCY VALUATION:AUTOMATIC POSTINGS

This table should be maintained if postings are made to an open item man-aged account or reconciliation account managed in a foreign Transaction Cur-rency. Exhibit 5.10 describes the menu path and transaction code, and Exhibit5.11 shows it on the menu.


Exhibit 5.9 Define FI Valuation Areas© SAP AG, 2006

• RE. Represents the Local Currency, and is used in the header section ofthe valuation run to store the Local Currency difference.

• FX. Represents Group Currency, and is used for temporarily storing thefirst steps (local to group translation difference) of the valuation in theFASB 52 tab.

• TR. Represents Group Currency, and is used in the second section of theFASB 52 tab. This can contain the translation differences but is primarilyused for account determination in the configuration table.


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The table in Exhibit 5.12 allows for configuring non–open items andopen item accounts using full valuation areas. Select the Chart of Accounts(e.g., INT) to configure the G/L accounts. Select the yellow arrow to transi-tion to the valuation area screen.

Select the valuation area to assign G/L accounts to in Exhibit 5.13. Val-uation RE will have G/L accounts assigned to it for revaluation “Type 10”Transaction to Local Currency valuation.




Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → Closing → Valuate→ Foreign Currency Valuation → Prepare AutomaticPosting for Foreign Currency Valuation (Exhibit 5.11)

Via TransactionCode OBA1


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Enter the G/L account, specific currency (if desired), and then assign thebalance sheet adjustment account and the Gain/Loss Account as in Exhibit5.14.

Select the valuation area to assign G/L accounts to in Exhibit 5.15. Val-uation TR will have G/L accounts assigned to it for revaluation “Type 30”Local Currency to Group Currency valuation.

Enter the G/L account, specific currency (if desired), and then assign thebalance sheet adjustment account and the Gain/Loss Account as in Exhibit5.16.


Exhibit 5.12 Define FI Valuation Area Automatic Account Assignments© SAP AG, 2006

Exhibit 5.13 Set Depreciation Area to Configure© SAP AG, 2006

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Exhibit 5.14 Configure G/L Accounts per Depreciation/Valuation Area© SAP AG, 2006

Exhibit 5.15 Set Depreciation Area to Configure© SAP AG, 2006

Exhibit 5.16 Configure G/L Accounts per Depreciation/Valuation Area© SAP AG, 2006

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6REVALUATION WITH ONE

VALUATION AREA

HIGHLIGHTS





• Unique Configuration

This method revaluates the G/L accounts using only one valuation area. Theend result is a revaluated balance from Transaction Currency to Local Cur-rency with the Gain/Loss posting as well as with translation and associatedCumulative Translation Adjustment (CTA) posting.

Additionally, postings are done in full each time revaluation is run. Re-versals are done in full prior to each revaluation run.

This method does provide for translation, and allows the original openitem table to continue to be used for account assignment postings (T030H).This method of execution has the most benefits.

This is the minimal configuration required to be FASB 52 compliant andstill configure the primary account assignment table (V-T030H), as opposedto having to configure the valuation area table (V-T030HB).

FASB 52 usage in SAP requires at a minimum one valuation area tobe defined as in this section. Without the use of at least one valu-ation area, the FASB 52 functionality will not work.

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SAP provides a means to execute foreign currency revaluation on spe-cific G/L accounts managed in foreign currencies (Exhibit 6.1). Exhibit 6.1describes the menu path and transaction code, and Exhibit 6.2 shows it onthe menu. Transaction code F.05 allows the revaluation of one or more ac-counts at the same time. The following steps occur with currency revaluationexecution:

Step 1. Each G/L account’s line item selected is revalued using the ex-change rate of the key evaluation date.





Via TransactionCode F.05


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Step 2. A posting is generated to the appropriate unrealized Gain/Lossaccount and balance statement adjustment account.

Step 3. A reversal posting is generated in total for the next day (unlessyou specify another date) to reverse the postings to the unrealizedGain/Loss.









In this section, the foreign currency account balances will be revaluated byconverting the Transaction Currency posting (GBP) to Local Currency (EUR)using the exchange rate for the original posting and the Transaction Currencyposting (GBP) to Local Currency (EUR) using the exchange rate for the eval-uation key date. The difference that results from the exchange rate fluctua-tions on the date of revaluation will be posted in SAP.

Header Area

© SAP AG, 2006

REVALUATION WITH ONE VALUATION AREA

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The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (periods 13 through 16are considered if the key date is within periods 1 through 12).


• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. First Local Cur-rency for valuation defines the Currency Type for Transactional Cur-rency to Local Currency valuation (“Type 10” in these examples).



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Postings Tab

© SAP AG, 2006

• Balance Sheet Preparation Valuation. This parameter can only be usedfor valuation runs that do not use valuation areas. This indicator does nothave an effect on non–open item accounts; it only affects open item accounts.

For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-versal postings will occur and valuation will be incremental. Refer toSAP Note No. 87538 in the References section at the end of the book.Most companies that run revaluation via this method (e.g., not usingvaluation areas) do not reverse postings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Valu-ation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the “balance sheet preparation val-uation” indicator and select the “reverse postings” indicator at the bottom.




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Selections Tab

© SAP AG, 2006


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• Valuate G/L Account Open Items. Select this indicator in com-bination with identifying the specific open item G/L accounts to be valuated.









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• Currency. Valuation runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this information. Leavingthis field blank will select all open items for valuation for any currency.



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Other Tab

© SAP AG, 2006




• File Name for Extract. Enter a file name if an extract is desired.Otherwise, leave this field blank.


FASB 52 Tab

In this first step, foreign currency Transaction Currency items are valuatedand posted to P&L accounts in the Local Currency. Additionally, the valua-tion difference is translated into Group Currency and posted. The differencethat is translated into Group Currency is stored in the valuation area FX.


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© SAP AG, 2006

• Translate Valuation Difference. Select this indicator to execute thetranslation using valuation areas.


• Save in Valuation Area. Select this indicator to store the valuation invaluation area FX.

• Use for Translation. This is not used for revaluation “Type 10”(Transaction to Local Currency). This is used for the second step, reval-uation 30 (Transaction to Group Currency).

• Translation of Currency Type or Valuation Area. This is not usedfor revaluation “Type 10” (Transaction to Local Currency). This is used for the second step, revaluation 30 (Transaction to GroupCurrency).


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• Amount in FC. This is the document currency (50,000 GBP in this ex-ample).






© SAP AG, 2006





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Step 1. Run SAP transaction code FBL3N for the open items on the keydate for the same G/L accounts selected, or select a few to re-view. Exclude the amounts (Transaction Currency) where theyare zero so you do not pick up adjustment amounts. Take theTransaction Currency and convert it to the Local Currency, usingthe exchange rate for the key date being used.



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In this section, the cumulative balance is calculated by taking the revaluatedamount from the revaluation “Type 10” calculation, translated into GroupCurrency, and adding the original Group Currency translated balance. Thedifference between this amount and Group Currency translated on the keydate is the cumulative translation adjustment posted in SAP.

Header Information

© SAP AG, 2006


• Evaluation Key Date. The evaluation key date is used to determine thedate of the currency exchange rates used in the revaluation. SAP will



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look for the exchange rate that falls on the key date entered. If one doesnot exist for that specific date, it will look for the exchange rate for theclosest date prior to the date entered as the evaluation key date. Theevaluation key date should be the last day of the period.

The evaluation key date is also used to evaluate open item docu-ments that have not been cleared as of this date (periods 13 through 16are considered if the key date is within periods 1 through 12).


• Valuation in Currency Type or Valuation Area. Valuation currencytype defines the type of valuation being performed. Second Local Cur-rency type defined for valuation defines the Currency Type for LocalCurrency to Group Currency valuation (“Type 30” in these examples).

Postings Tab

© SAP AG, 2006



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For open item accounts, this indicator is key. If not selected, rever-sals will be posted and valuation will be cumulative. If selected, no re-versal postings will occur and valuation will be incremental. Refer toSAP Note No. 87538 in the References. Most companies that run reval-uation via this method (e.g., not using valuation areas) do not reversepostings and post incrementally.

To post reversals for non–open item accounts, select the “reversepostings” indicator at the bottom under “For G/L Account Balance Val-uation” and choose a date. To post reversals for both open item andnon–open item accounts, do not select the “balance sheet prepara-tion” valuation indicator, and select the “reverse postings” indicator atthe bottom.









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Selections Tab

© SAP AG, 2006



• G/L Account. Identify the specific open item G/L account(s) that willbe revaluated. These same G/L accounts will appear in the G/L balancetab, and even if the “Valuate G/L Account Open Items” indicator is se-lected, the accounts identified in both the open items and G/L balancetab will be valuated based on their G/L account definition as open item


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or line item. If a range of G/L accounts that include both open item andnon–open item accounts is identified, and only the “Valuate G/L Ac-count Open Items” indicator is selected, then only the G/L accounts inthe range that are open item will be revaluated.










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• Currency. Valuations runs can be limited to execution by currency. Torun revaluation on just GBP currency, enter this information. Leav-ing this field blank will select all open items for valuation for any currency.



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Other Tab

© SAP AG, 2006






FASB 52 Tab

In this second step, the valuated Local Currency is translated into Group Currency.


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© SAP AG, 2006

• Translate Valuation Difference. This step is not used for revaluation“Type 30” (Transaction to Group Currency). This is used in the firststep, revaluation 10 (Transaction to Local Currency).

• Exchange Rate Type for Translation. Select the appropriate exchangerate type.

• Save in Valuation Area. This is not used for revaluation “Type 30”(Transaction to Group Currency). This is used in the first step, revalu-ation 10 (Transaction to Local Currency).

• Use for Translation. Select this to execute the second step of the trans-lation to Group Currency using valuation areas.

• Translation of Currency Type or Valuation Area. Not requiredwhen using one valuation area.

The exchange rate type for translation must be selected with thesame exchange rate type used in the “Type 10” revaluation, evenduring the second step. If this is not, the revaluation calculationswill not be correct.


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• Amount Valuated. This is the Transaction Currency (72,105 EUR)translated into Group Currency ($94,068.18 USD) on the key date, lessthe translated Group Currency amount from “Type 10” valuation($2,061.27 USD); $92,006.92 USD is the valuated amount in this ex-ample.


• New Difference. This is the current cumulative valuation adjustment,which is the open item cumulative balance in Global Currency(96,055.05 USD), less the valuated amount ($92,006.92 USD) (FirstLocal Currency translated to USD).


© SAP AG, 2006

• Local Currency 2 Amount. The original Group Currency less the val-uated amount.

• Process Batch Session. Run SM35 to process the batch session. Select“Process errors only,” and select “Execute.”


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In order to validate the results, select a few G/L accounts to analyze. Use the following steps to compare the revaluation from Transaction to LocalCurrency:

Step 1. Run FBL3N for the open items on the key date for the same G/Laccounts selected, or select a few to review. Exclude theAmounts (Transaction Currency) where they are zero so you donot pick up adjustment amounts. Take the Transaction Currencyand convert it to the Local Currency using the exchange rate forthe key date being used.



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Header Area

© SAP AG, 2006

If foreign currency revaluation is run with multiple company codesand any of the G/L accounts being run in the same valuation mixeddefinitions between open item and non–open item, then SAP willuse the specifications in this table and ignore any configuration inthe previous table V-T030.


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• Amount in FC. This is the document currency (50,000 GBP in this ex-ample).


• Amount Valuated. This is the Transaction Currency (50,000 GBP)translated into Local Currency (72,610 EUR) on key date.




© SAP AG, 2006





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In order to validate the results, select a few G/L accounts to analyze. Use the following steps to compare the revaluation from Transaction to LocalCurrency:

Step 1. Run FBL3N for the open items on the key date for the same G/Laccounts selected, or select a few to review. Exclude the amounts(Transaction Currency) where they are zero so you do not pickup adjustment amounts. Take the Transaction Currency and con-vert it to the Local Currency, using the exchange rate for the keydate being used.



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• Amount Valuated. This is the Transaction Currency (72,610 EUR)translated into Group Currency ($96,193.72 USD) on the key date, lessthe translated Group Currency amount from “Type 10” valuation($2,762.21 USD); $93,431.52 USD is the valuated amount in thisexample.


• New Difference. This is the current cumulative valuation adjustment,which is the open item cumulative balance in Global Currency(96,055.05 USD), less the valuated amount ($93,431.52 USD) (FirstLocal Currency translated to USD).


© SAP AG, 2006


• Local Currency 2 Amount. This is the original Group Currency($96,055.05 USD) less the valuated amount ($93,431.52 USD).



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In order to validate the results, select a few G/L accounts to analyze. Use the following steps to compare the revaluation from Transaction to Local Currency:



If foreign currency revaluation is run with multiple company codesand any of the G/L accounts being run in the same valuation mixeddefinitions between open item and non–open item, then SAP willuse the specifications in this table and ignore any configuration inthe previous table V-T030.


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UNIQUE CONFIGURATION

The valuation areas are defined here as in Exhibit 6.7. Exhibit 6.7 describesthe menu path and transaction code, and Exhibit 6.8 shows it on the menu.Valuation areas are required with this valuation method. Valuation areas storethe translated amounts in table BSIS. Valuation areas are freely definable, asin Exhibit 6.9.





Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → Closing → Valuate→ Foreign Currency Valuation → DefineDepreciation Areas (Exhibit 6.8)


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Exhibit 6.9 Define Valuation Areas© SAP AG, 2006


• FX. FX is the only valuation area required for this method of revaluation.FX represents Group Currency, and is used for temporarily storing the firststep (local to group translation difference) of the valuation in the FASB 52tab. Separate account assignments on this valuation area are not required.

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7COMMON REVALUATION

CONFIGURATION

HIGHLIGHTS

• Define Local Currencies per Company Code

• Exchange Rate Types

• Valuation Methods

• Document Types

• Revaluation Account Assignments for Non–Open Item Accounts

• Revaluation Account Assignments for Open Item Accounts

• Translation

• Payment Program Translation Activation

DEFINE LOCAL CURRENCIES PER COMPANY CODE

The Local Currency of the company code is defined here as in Exhibit 7.3.Exhibit 7.1 describes the menu path and transaction code, and Exhibit 7.2shows it on the menu. Additional currencies can be defined as Local Currency2 and Local Currency 3, respectively. This area is key to setting up companycodes and translation requirements correctly. Typically, the first Local Cur-rency is set up as the country currency, and the second Local Currency is setup as the reporting/Group Currency.

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In Exhibit 7.3, the second Local Currency settings are commonly used inthe industry, with the exception of the “source currency,” which can be set toeither the Transaction Currency or the first Local Currency. If set to “2,” therevaluation program takes the first Local Currency amount to calculate the amount in “Type 30.” If set to “1,” it uses the Transaction Currency as thebasis for the revaluation 30 calculation.

The source currency is key to foreign currency valuation and should notbe changed after postings have been made. Source currency equal to “1”

If you change the settings on the source currency for the secondand third local currencies, the values in BKPF-BASWx will becomeincorrect. Refer to SAP Note No. 335608 in the References at theend of the book.





Via Menus IMG → Financial Accounting → FinancialAccounting Global Settings → Company Code →Multiple Currencies → Define Additional LocalCurrencies (Exhibit 7.2)


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takes the Transaction Currency as the basis of revaluation. Source currencyequal to “2” takes the first Local Currency (valuated currency) as the basis.

EXCHANGE RATE TYPES

Exchange rate types are used in all currency revaluations, either directly,such as in the FASB 52 execution, or indirectly, through the configuration ofthe valuation method. They are set up in the IMG via Exhibit 7.4. Exhibit 7.4describes the menu path and transaction code, and Exhibit 7.5 shows it on themenu. The exchange rate type is used specifically to identify the type of ex-change rate in the TCURR table.

The exchange rate type is freely definable. “B” in Exhibit 7.6 is used inthis example for the spot rate. More specific settings are available if required,such as the reference currency and buying/selling currency rates.

COMMON REVALUATION CONFIGURATION

Exhibit 7.3 Company Code Currencies Defined© SAP AG, 2006

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DEFINE VALUATION METHODS

Valuation methods group a set of instructions for the valuation execution atmonth end. The detail and posting instructions for the valuation are definedin the IMG via Exhibit 7.7. Exhibit 7.7 describes the menu path and transac-tion code, and Exhibit 7.8 shows it on the menu. The valuation method is aspecific parameter identified in the revaluation run.


Exhibit 7.6 Exchange Rate Type Configuration© SAP AG, 2006




Via Menus IMG → General Settings → Currencies → CheckExchange Rate Types (Exhibit 7.5)


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In order to be able to reverse revaluation runs without having tomanually reverse the journal entries, set up a unique valuationmethod as the “Reset selected,” “always valuate.” Use this valua-tion method and select the “balance sheet prep” indicator whenexecuting the reversal run. Refer to SAP Note No. 545032 in theReferences for more information.





Via Menus IMG → Financial Accounting → AccountsReceivable & Accounts Payable → BusinessTransactions → Closing → Valuate → ForeignCurrency Valuation → Define Valuation Methods(Exhibit 7.8)

Via TransactionCode OB59

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Valuation methods provide the definition of how to run currency revalu-ation. Detailed settings are customizable, and specific field settings are shownin Exhibit 7.9. An explanation of each option in the exhibit follows:

• Lowest Value Principle. If selected, Local Currency valuation is onlydisplayed if it is a loss (difference between the Local Currency amountand the valuated amount is negative).

• Strict Lowest Value Principle. If selected, Local Currency valuationis only displayed if its loss is greater than the previous valuation entries.

• Always Valuate. If selected, revaluations are always executed andposted.

• Revalue Only. If selected, revaluations (increases/gains), not devalua-tions (decreases/losses), will occur.

• Reset (Valuation Run). If selected, open items are valuated at the ac-quisition price, account determination is reversed, old valuation method


Exhibit 7.9 Valuation Methods Defined© SAP AG, 2006

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is reset, and the valuation difference is set to zero. This is commonlyused when setting up a valuation method to reverse revaluation runs.

• Corp Group-Vendors/Customers. G/L accounts are valuated accord-ing to the valuation group, and customer and vendor accounts are val-uated according to the customer and vendor group key in the customer/vendor master records.

• G/L Valuation Group. If selected, open items are balanced per ac-count/group and currency. If not selected, open items are summarizedand valuated per reference number, and if no reference number exists,then each line item is valuated individually.

• Balance Valuation. If not selected (which is more common), openitems are summarized and valuated individually by reference number(if it exists). If selected, open items are summarized, valued, and bal-anced by account, group, and currency.

• Post per Line Item. If selected, a line item per valued item is posted inthe valuation postings and the adjustment account; otherwise, it isposted in summarized form.

• Write Extract. If selected, the revaluation run via F.05 must have abatch session name. Information is stored in this file for each valuatedline item. Normally, this is not selected unless there is a non-SAP ap-plication need for the extracted file.

• Document Type. See configuration in the common area to configurethe settings for a valuation document type. Generally, the documenttype assigned here would be different from the common documenttypes used in normal transaction postings. This will allow for easier ac-count analysis.

• Debit Balance Exchange Rate Type. The exchange rate type is usedfor valuation of foreign currency items with a positive balance.

• Credit Balance Exchange Rate Type. The exchange rate type is usedfor valuation of foreign currency items with a negative balance.

• Determine Exchange Rate Type from Account Balance. The cur-rency valuation is determined based on the account balance in the rel-evant currency.

• Exchange Rate Type from Invoice Reference. The currency valua-tion is determined based on the balance per invoice reference number.


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• Use Exchange Hedging. If selected, items are valuated at the hedgedexchange rate.

• Minimum Difference for Display in Foreign Currency Valuation.This field indicator allows one to suppress currency rounding differ-ences up to the selected amount for hedged or fixed exchange rate calculations.

DEFINE DOCUMENT TYPES FOR CURRENCY REVALUATION

Document types provide the ability to uniquely identify postings of a partic-ular type (e.g., foreign currency revaluation postings). They are defined in theSAP IMG through Exhibit 7.10. Exhibit 7.10 describes the menu path andtransaction code, and Exhibit 7.11 shows it on the menu. They provide themeans to uniquely define a number range, a document type to reverse thepostings on, and the allowed posting account types (e.g., G/L accounts, ven-dors, customers, and fixed assets).

It is recommended to create a document type, such as in Exhibit 7.12, thatis unique for foreign currency postings. This allows you to quickly view thesepostings when viewing multiple documents.

The currency revaluation document type can be set up as shown in Exhibit 7.12.

Some of the key settings for the document type are defined as follows.Not all fields are discussed in this section.




Via Menus IMG → Financial Accounting → FinancialAccounting Global Settings → Document →Document Header → Define Document Types(Exhibit 7.11)


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• Document Type. The unique two-character document identifier to beused for posting currency valuation adjustments. This is defined in thevaluation method used in currency revaluation.

• Number Range. Select the number range from those set up for ac-counting documents. The range used can be the same as for most of the



Exhibit 7.12 Revaluation Document Type© SAP AG, 2006

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accounting documents. The document type will be the unique identifierfor these transactions.

• Reverse Document Type. The document identifier to be used for post-ing reversals of documents assigned the primary document type. Thiscan be the same identifier as used for the primary document.

• Account Types Allowed. This indicates the type of accounts to whichthis document type can post.

REVALUATION ACCOUNT ASSIGNMENTS

Three tables can be configured for foreign currency revaluation. The follow-ing two are relevant to the revaluation method foreign currency revaluationwithout valuation areas. The third table is relevant only to valuation areausage and is covered as unique configuration within the respective chapter.All A/P, A/R, and all accounts that receive postings in a foreign currencymust be configured in one of these two tables in order to be able to run reval-uation. If the configuration does not exist for an account and SAP is calculat-ing a realized Gain/Loss posting, the result will be a hard error. If theconfiguration does not exist and revaluation is run, SAP will generate a batchinput session. This session will need to be processed, with corrections manu-ally entered, to complete the postings.

Non–Open Item G/L Accounts (Table T030S)

This table is used for foreign currency revaluation account assignments fornon–open item G/L accounts. This table requires the configuration and usageof Exchange Rate (E/R) difference keys on the G/L master records. ExchangeRate differences are posted to adjustment accounts only.

If no entries exist in the SAP table T030S, then SAP searches thenext table (V-T030H) for the correct account assignments. Refer toSAP Note No. 315155 and SAP Note No. 548946 in the Refer-ences for more information on the order that SAP uses to searchthese tables to find the account assignments.


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• Open Item G/L Accounts (table V-T030H). This table is used for theforeign currency revaluation account assignments for open item G/Laccounts. Non–open item accounts can be configured in this table too.

ACCOUNT ASSIGNMENTS FOR VALUATION:NON–OPEN ITEMS (V-T030S)

Non–open items that manage foreign currencies can be configured for reval-uation in table V-T030S. This method of configuring (Exhibit 7.13)non–open item accounts was required in earlier releases of SAP, but in laterreleases of SAP, both non–open item and open item accounts can be config-ured in the same area/table (V-T030S). Exhibit 7.13 describes the menu pathand transaction code, and Exhibit 7.14 shows it on the menu.

The table in Exhibit 7.15 allows for configuring non–open items andopen item accounts. Select KDB to configure non–open item accounts.

If foreign currency revaluation is run with multiple company codesand any of the G/L accounts being run have mixed definitions be-tween open item and non–open item, SAP will use the specifica-tions in this table and ignore any configuration in the previous tableV-T030S (refer to SAP Note No. 312884 in the References for moreinformation or instructions on how to change this default setting).




Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → Closing → Valuate→ Foreign Currency Valuation → PrepareAutomatic Posting for Foreign Currency Valuation(Exhibit 7.14)


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The exchange rate field is freely definable in Exhibit 7.16. This enablespostings for non–open items by assigning the exchange rate field on the G/Laccount. Exhibit 7.17 describes the menu path and transaction code, and Ex-hibit 7.18 shows it on the menu. In this example, G/L accounts assigned E/Rkey “USD” will have gains/losses posted to G/L account 230000.

The E/R key is assigned to the G/L account in the G/L account mas-ter record.


Exhibit 7.15 Exchange Rate Difference Transaction KDB© SAP AG, 2006


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Via Menus IMG → Financial Accounting → AccountsReceivable & Accounts Payable → BusinessTransactions → Closing → Valuate → ForeignCurrency Valuation → Prepare Automatic Postingfor Foreign Currency Valuation (Exhibit 7.18)


Exhibit 7.16 Exchange Rate Difference Using Exchange Rate Key© SAP AG, 2006


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ACCOUNT ASSIGNMENTS FOR VALUATION: OPEN ITEMS (V-T030H)

This table (V-T030H) should be maintained if postings are made in a foreignTransaction Currency to open item managed balance sheet accounts or rec-onciliation accounts.

Non–open item managed accounts can also be maintained in this table aslong as they are not maintained in V-T030S.

The table in Exhibit 7.19 allows for configuring non–open items andopen item accounts. Select KDF to configure open item accounts.

Header Information

Foreign currency account assignments are not company code specific, butthey can be controlled by the currency and currency type. Normally, a blankCurrency Type and Currency “Type 30” are the two setups used for each G/Laccount being revaluated. A blank Currency Type will be used for all Cur-rency Types not specifically identified, as in Exhibit 7.20.


Exhibit 7.19 Exchange Rate Differences (transaction KDF)© SAP AG, 2006

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Exchange Rate Difference Realized

Realized Gain/Loss postings occur in SAP when the postings are cleared inopen item managed accounts. Exhibit 7.21 shows where the G/L accounts areconfigured for posting the Gains/Losses.

When the original posting is cleared in SAP, the realized Gain/Loss post-ing is calculated by SAP by taking the original posting Transaction Currencyand translating it to Local Currency on the clearing translation date. SAP


Exhibit 7.20 Maintain Account Assignments© SAP AG, 2006

• G/L Account. This is the balance sheet account in which foreigncurrencies are managed and revaluated.

• Currency. If left blank, this configuration is used for all valuations. TheCurrency field can also be used to more selectively configure G/L accountassignments. It is important to note that SAP looks at the TransactionCurrency, not the Local Currency, on the posting when this field isuniquely identified, regardless of how currency configuration is defined.

• Currency Type. If left blank, this configuration is used for all therevaluations not otherwise specified. Default account assignments can beset per currency type valuations. “Type 10” revaluation (transaction toLocal Currency) can designate one set of account assignments and “Type30” revaluation (transaction to Group Currency) can designate another.

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then posts the difference from the original posting that remains unchangedand the newly calculated value as the realized Gain/Loss. At the same time,SAP does the same type of translation from Transaction Currency to GroupCurrency and posts that difference as realized Gain/Loss.

During some postings, it may appear that the system is posting a zeroamount, realized Gain/Loss posting. SAP will display the line item if theGain/Loss is in a different currency (Document, Local, or Group). Change thecurrency display to view the amount in the currency that was translated.


Exhibit 7.21 Realized Exchange Rate Gain/Loss Accounts© SAP AG, 2006

• Realized Loss G/L. Account for losses from realized exhange rate fluctuations(posted when clearing open items in foreign currency).

• Realized Gain G/L. Account for gains from realized exchange ratefluctuations (posted when clearing open items in foreign currency).

• Valuation. These are the accounts that the unrealized Gain/Losses are postedto when foreign currency revaluation is executed, Exhibit 7.22. They becomerealized when they are cleared.

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Realized Gain/Loss postings can also occur during foreign currency in-tercompany postings, including but not limited to stock transports that in-volve foreign currency values.

VALUATION

These are the accounts that the unrealized Gain/Losses are posted to whenforeign currency revaluation is executed. They become realized when cleared.


Exhibit 7.22 Valuation Gain/Loss and Balance Sheet Adjustment Accounts© SAP AG, 2006

• Valuation Loss. Account for losses from the foreign currency valuation of open items.

• Valuation Gain. Account for gains from the foreign currency valuation of open items.

• Balance Sheet Adjustment. The Balance Sheet Adjustment Account is the account towhich the receivables and/or payables adjustment are posted during the foreign cur-rency valuation of open items. If the G/L account is a reconciliation account, this mustbe a different G/L account that allows direct postings (as reconciliation accounts donot allow direct postings). In general, it is recommended that the B/S accounts beseparate accounts from the G/L account, as the gain/loss postings from revaluation 10could get picked up for revaluation again during revaluation 30 (depending on theversion and patch level of SAP).

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TRANSLATION

Exhibit 7.23 determines whether translation Gains/Losses are posted duringclearing foreign currency open item processing (such as during payment pro-cessing). Translations occur if the items to be cleared already have beenrevaluated via F.05 and unrealized Gains/Losses have been posted. The val-uation difference is posted to a separate translation account and the offset toa clearing account.

INCOMING PAYMENTS:TRANSLATION POSTING ACTIVATION

This configuration in Exhibit 7.24 determines whether translation Gains/Losses are posted during clearing of foreign currency open items, and Exhibit7.25 shows where it is on the menu. Translations are posted if the item beingcleared has been revaluated during periodic currency revaluation.

To enable translations, select the indicator (Exhibit 7.26) for the relevantcompany codes.

PAYMENT PROGRAM TRANSLATION ACTIVATION

This setting (Exhibit 7.27) determines whether translation Gains/Losses areposted during clearing of foreign currency open items, and Exhibit 7.28shows it on the menu. Translations are posted if the item being cleared hasbeen revaluated during periodic currency revaluation.

If you do use the same B/S adjustment account as the G/L accountbeing revaluated, and the second source currency is set to “2,” totake the first Local Currency amounts, then enter a selection param-eter to exclude postings with transaction currencies equal to zeroand the revaluated Gain/Loss postings will be ignored.


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• Translation Loss. This is the posting account for foreign currency translation losses asdefined previously. This account can be the same as or different from the gains account.

• Balance Sheet Adjustment Loss. Offset clearning posting to the translation lossposting. This account can be the same as or different from the balance sheetadjustment gain account.

• Translation Gain. Posting account for foreign currency translation gains as definedabove. This account can be the same as or different from the loss account.

• Balance Sheet Adjustment Gain. Offset clearing posting to the translation gainposting. This account can be the same as or different from the balance sheetadjustment loss account.

Exhibit 7.23 Translation Gain/Loss and Balance Sheet Adjustment Accounts© SAP AG, 2006



Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → IncomingPayments → Incoming Payments Global Settings →Enable Translation Posting (Exhibit 7.25)


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Exhibit 7.26 Post Translations© SAP AG, 2006



Via Menus IMG → Financial Accounting → Accts Rec. & AcctsPay. → Business Transactions → OutgoingPayments → Automatic Outgoing Payments →Payment Method/Bank Selection for PaymentProgram → Set up Paying Company Codes forPayment Transactions (Exhibit 7.28)

Via TransactionCode


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Exchange Rate Differences during Payment Processing

This indicator (Exhibit 7.29) determines whether exchange rate differencesare to be posted by the payment program. If the indicator is selected, ex-change rate differences are not calculated. The Local Currency amount wouldrepresent the total Local Currencies from the cleared items (not the foreigncurrency translation). If the indicator is not set, the differences are calculatedfrom the original posting and from the clearing/payment posting for foreigncurrencies using the exchange rate on the payment program translation date.

Exchange Rate Indicator

Set the “No Exchange Rate Differences” indicator to post translation Gains/Losses during open item clearing.



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8VALUATION VARIANT SETUP

HIGHLIGHTS

• Revaluation List Variant

• Revaluation Posting Variant

Custom variants are a way to display reports or execution outputs and selec-tively identify key fields that are important to the evaluation. Custom variantscan be set up for the currency valuation calculations and the currency valua-tion postings. The currency valuation calculation variant can be set up and se-lected on the currency revaluation tab. The postings variant cannot be savedto display automatically and must be reselected for each valuation and displayof the postings. The samples created here can be adjusted for more custom requirements.

LIST/CALCULATION VARIANT

The List/Calculation variant shows the values that are used in the currencyvaluation calculations. The default SAP display has minimal fields displayed.The variant in Exhibit 8.1 allows for a one-screen viewing of the criticalfields. This can be modified for a more custom view if desired. To set up the

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display variant for currency valuation calculations, select the Line 1 Tab, asin Exhibit 8.1, and set up the indicators as shown. Setup the sort order asshown in Exhibit 8.2.


Exhibit 8.1 Set up the List Variant “/FXREVALUE” Example© SAP AG, 2006

Exhibit 8.2 Save the List Variant Sort Order Example© SAP AG, 2006

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POSTING VARIANT

The posting variant shows how the postings will be made in SAP. If accountassignment errors occur, they will be visible on this display. The default SAPdisplay has all fields available displayed and requires scrolling to the right toview all fields. The variant in Exhibit 8.3 allows for a one-screen viewing ofthe critical fields. This can be modified for a more custom view if desired. Toset up the posting variant to view three currencies, select the Header Tab andthe Line 1 tab, as in Exhibit 8.3.

Select the Position Tab and then the Line 1 tab and select the fields as dis-played in Exhibit 8.4.

VALUATION VARIANT SETUP

Exhibit 8.3 Header Tab Setup© SAP AG, 2006

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Save the variant as displayed in Exhibit 8.5.


Exhibit 8.4 Position Tab Setup© SAP AG, 2006

Exhibit 8.5 Position Tab Setup© SAP AG, 2006

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APPENDIX

TRANSACTION CODES(T-CODES)

OC41 Define/Enter Exchange Rates

OBA1 Configure Automatic Postings for Foreign Currency Valuation

OBYC Configure Inventory Valuation Account Assignments

OBY6 Configure Global Company Code Setup

OBYY Configure Account for Exchange Rate Difference Postings (not normally for U.S. companies)

OB59 Configure Valuation Methods

OBA7 Configure Document types

F.05 Currency Revaluation Execution

F.13 G/L Clearing

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REFERENCES: SAP OSS NOTE

SAP Note No. 441333 SAPF100 Logic with GR/IR accounts

11.03.2005

SAP Note No. 87538 SAPF100 - posting system

03.09.2004

SAP Note No. 315155 Account determination for valuation area

31.08.2004

SAP Note No. 335608 Source Currency Settings

SAP Note No. 448306 FASB52 in FI with Release 4.6C

31.08.2004

SAP Note No. 545032 FAQ: SAPF100 Reversing “Balance Sheet Prep.”

03.09.2004

SAP Note No. 548946 FAQ: SAPF100 Account Determination

03.09.2004

SAP Note No. 692693 SAPF100: Performance improvement w/ BDIFF update

02.11.2004

SAP Note No. 312884 RFSBEW00: Changed account determination

22.09.2004

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GLOSSARY

ConversionThe exchange of one currency for another.

Cumulative Translation Adjustment (CTA)The exchange rate movement Gain/Loss between the Local Currency and the GroupCurrency exchange rates. Posted to a G/L account within shareholder’s equity.

Currency, DocumentThe currency in which transactions take place. Also known as Transactional Cur-rency or Foreign Currency.

Currency, ForeignThe currencies in which transactions take place that are different from the Local Cur-rency. Also known as Transactional Currency or Document Currency.

Currency, FunctionalThe currency of the primary environment in which the entity operates, generates orexpends cash. Also known as Local Currency.

Currency, GroupThe reporting currency of the enterprise. Also referred to as Local Currency 2 andParallel Currency.

Currency, LocalThe currency of the particular company code and country. Also known as the Func-tional Currency.

Currency, Local 2The reporting currency of the enterprise. Also referred to as Group Currency andParallel Local Currency.

Currency, ParallelThe reporting currency of the enterprise. Also referred to as Group Currency andLocal Currency 2.

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Currency, ReportingThe currency in which financial statements are prepared.

Currency, TransactionalThe currency in which transactions take place. Also known as Document Currency orForeign Currency.

Exchange RateThe exchange rate is the rate at which one unit of a currency can be exchanged for(converted into) another currency on a particular date.

FASBFinancial Accounting Standards Board.

FASB 52Financial Accounting Standards Board—document 52.

Foreign CurrencyA currency other than the Local Currency. Also known as Functional Currency orTransactional Currency of an entity.

Foreign Currency TransactionsOccur when an item is transacted in a foreign currency.

Revaluation “type 10”Differences arising from the document to Local Currency revaluation. Calculated asthe difference between the Local Currency value on the original posting date and onthe current key revaluation date. Differences are posted to a P&L account.

Revaluation “type 10” with translationIncludes revaluation “type 10” and another posting (on the same line item) that trans-lates the Gain/Loss from Local Currency to Group Currency based on the fluctuationof the exchange rate.

Revaluation “type 30” (CTA, Currency Translation Adjustment)Differences arising from the Local to Group Currency revaluation. Calculated as thedifference between the Group Currency value on the original posting date and on thecurrent key revaluation date (Local Currency amount times the FX exchange rateGain/Loss differences).

Transaction DateThe date on which a transaction is recorded.

GLOSSARY

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Transaction Gain/LossesResult from a change in exchange rates on transactions that occur in nonlocal cur-rencies. It represents an increase or decrease in the transaction’s original value basedon the current exchange rate.

TranslationThe translation between the Local Currency and the Group Currency for reportingpurposes.

Translation AdjustmentsResult from the process of translating financial statements from Functional to Re-porting currency.

GLOSSARY

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INDEX

A

Account(s):adjustment, 2, 29, 79, 116, 121, 163,

166, 173–174alternative number, 35, 46, 85, 97,

127, 139archived, 24asset, 2, 25, 165balance sheet, 2–4, 10, 21, 26,

170–171balance sheet, adjustment, 2, 116,

173, 175bank, cash, 10, 20, 23cash discount, 22–23clearing, 11, 22–23, 174cumulative translation adjustment

(CTA), 2, 9, 91, 119, 133, 187determination, 22, 29, 79, 114, 121,

162, 185gain/loss, 19, 21, 24, 29, 79, 116, 121,

172–175general ledger (G/L), 10–11, 19–26,

153, 163, 164–168, 170–173goods receipt/invoice receipt (GR/IR),

33, 45, 83, 95, 125, 137liability, 2offset, 26

open item, 21, 31–34, 42–45, 81–84,92–95, 115, 123–126, 134–137,157, 167, 170

original, 2, 9, 77original asset, 2payroll, 23profit and loss (P&L), 3, 23, 33–34,

45, 83–84, 86, 95, 125–127, 137,188

raw material, 24reconciliation, 21–22, 24–26, 34, 46,

84, 96, 114, 126, 138, 173revaluation, 157, 166–167, 170subledger, 24tax, 24–25types, 164–166

Account Indicator(s):account currency, 3, 19–20balances in local currency, 21–22,

25–26exchange rate difference key, 22,

25–26, 34, 45, 84, 95, 126, 137line item(s), 24–26valuation group, 23, 25–26, 163

Accounts Payable(s) (A/P), 3, 5, 10, 12,25, 34, 45, 84, 95, 126, 138, 173

Accounts Receivable (A/R), 3, 10, 25,173

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Advances, 5Amount:

in Foreign Currency (FC), 38, 49, 54,58, 62, 66, 70, 74, 88, 100, 105,110, 130, 142, 147, 152

in group currency, 9, 17, 49, 58, 66,74, 100, 110, 142, 152

in local currency, 38, 54, 62, 70, 88,105, 130, 147

valuated, 1, 11, 38, 49, 54, 58, 62, 70,88, 91, 105, 130, 133, 142, 147,152, 162

Assets:depreciation, 33, 45, 83, 95, 125,

137translation difference, 5, 114, 156

B

Balance Sheet. See ReportingBalance Sheet Preparation, Valuation.

See ValuationBatch Session:

batch session, 31, 38, 43, 49, 54, 58,62, 66, 70, 74, 81, 88, 93, 101, 105,111, 123, 130, 135, 142, 147, 152,163

input session, 31, 43, 81, 93, 113, 123,135, 166

Bloomberg. See Exchange Rate(s)Business Area, 34, 45–46, 84, 95–96,

126, 137–138Business Example(s), 1, 6–7, 12

C

Company code, Target, 35, 47, 85, 97,127, 139

Consolidated Equity, 4Consolidation, 5

Cumulative Translation Adjustment(CTA), 2, 9, 91, 119, 133, 187

Currency:adjustment, 2–4, 17–18company code, 19–20, 25–26country, 157document, 38, 54, 62, 70, 88, 105,

130, 147, 187–188foreign, 1–5, 8, 10, 12, 19–22, 24–26,

28–30, 41–42, 52, 57, 60, 64, 68,72, 78–80, 86, 92, 103, 108, 113,120–122, 127, 134, 145, 150, 153,158, 163, 164–167, 170, 172–175,183, 187–188

functional, 3–4, 187–188general ledger. See Account Currency,group, 2–4, 7–10, 12, 17–20, 27–28,

36, 38, 42, 47, 49, 54, 58, 62, 64,66, 70, 72, 74, 86, 88, 91, 97–98,100, 105, 110, 114, 116, 127–128,130, 133–134, 139–140, 142, 147,152, 156–157, 171–172, 187–189

hedges, hedged, hedging, 2, 164local currency 2, 38, 49, 54, 58, 62,

64, 66, 70, 72, 74, 88, 100, 105,110, 130, 142, 147, 152, 157, 187

parallel, 187purchase order, 33, 45, 83, 95, 125, 137reporting, 4, 12, 187, 189reporting, common, 2source, 158–159, 172, 185transaction, 1–2, 4, 8–10, 12, 17, 19,

21–22, 26–27, 29, 38–39, 50,54–55, 60, 62, 68, 70, 77, 79, 86,88–89, 100–101, 105–106,110–111, 114, 119, 121, 127,130–131, 142–143, 147–148,152–153, 158–159, 170–172

transactional, 21, 30, 52, 80, 103, 122,145, 187–188

translation, 1, 3–4, 7–8, 17, 174–176,188

INDEX

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valuation adjustment, 2, 38, 49, 54,58, 62, 66, 70, 74, 88, 100, 105,110, 130, 142, 147, 152, 165

Customer Open Items. See Open ItemsCustomer Reconciliation Account. See

Accounts

D

Delivery Costs, 33, 45, 83, 95, 125, 137Demand Note Payable, 5Document:

date, 32, 43, 82, 93, 124, 135number, 34, 46, 84, 96, 126, 138open item, 30, 42, 80, 92, 122, 134type(s), 26, 29, 79, 121, 157,

163–166, 183

E

Evaluation key Date(s). See Key datesExchange Rate(s):

average, 2–4, 10Bloomberg, 3currency, 1–3, 8, 10–11, 13–16, 20,

30, 40–41, 51, 56, 59, 63, 67, 71,75, 80, 991, 122, 133, 187–188

spot rates, 3–4, 159table, 3type, 23, 29, 36, 47, 79, 86, 97–98,

121, 128, 140, 157, 159, 160, 163Exchange Rate Difference Key, 22, 25,

26, 34, 45, 84, 95, 126, 137Exhibit(s):

Exhibit 2.1 Revaluation withoutValuation Areas, IncrementalPostings, 12, 13

Exhibit 2.2 Revaluation withoutValuation Areas, CumulativePostings, 12, 14

Exhibit 2.3 Revaluation with MultipleValuation Areas, 12, 15

Exhibit 2.4 Revaluation with oneValuation Area, 12, 16

Exhibit 4.3 Excel Calculation,revaluation type 10 withoutvaluation areas, period 1, 39–40

Exhibit 4.4 Excel Calculation,revaluation type 30, withoutvaluation areas, period 1, 50–51

Exhibit 4.5 Excel Calculation,revaluation type 10, withoutvaluation areas, period 2, 55–56

Exhibit 5.3 Excel Calculation,revaluation type 10, with fullvaluation areas, period 1, 89–90




Exhibit 6.3 Excel Calculation,revaluation type 10, with onevaluation area, period 1, 131–132


Exhibit 6.5 Excel Calculation,revaluation type 10, with onevaluation area, period 2, 149


Expense(s). See Reporting

INDEX

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F

File Name for Extract, 35, 47, 85, 97,127, 139

FI Data, 33, 45, 83, 95, 125, 137Financial Accounting Standards Board

(FASB):Statement of Financial Accounting

Standards 52 (FASB 52), 1–4, 8–9,28, 35, 47, 86, 97, 114, 119, 127,139, 156, 159, 188

U.S. GAAP, 1website, 1

Fiscal Year Variants, 10Foreign Currency:

assets, 5transactions, 3, 12, 21, 188

G

Gain/Loss(s). See Posting(s)General Ledger (G/L). See Accounts, 2,

4, 5

H

Hedging. See Currency

K

Key Dates:key date(s), 1, 4, 11, 30, 38–39,

41–42, 49–50, 54–55, 58, 62, 66,70, 74, 80, 88–89, 91–92, 100–101,105–106, 110–111, 122, 130–131,133–134, 142–143, 147–148,152–153

key date(s), evaluation, 8, 29–30,41–42, 60, 79–80, 91–92, 121–122,133–134

key date(s), valuation, 32, 43, 82, 93,124, 135

L

Liabilities. See ReportingList Variant, 35, 46, 85, 96, 127, 139,

179, 180Long Term Investments, 8

M

Master Data. See Account, GeneralLedger (G/L)

Month End, 3–4, 8, 10, 23, 160

N

Net Investment(s). See Reporting

O

Open Item(s):accounts. See Accounts,customer, 34, 45–46, 84, 96, 126, 138foreign currency, 174open item(s), 9, 11, 21, 24, 32–34, 39,

43–46, 50, 55, 82–84, 89, 93–96,101, 106, 111, 124–126, 131,136–138, 143, 153, 160–163,167–168, 170, 174

vendor, 34, 45, 84, 95, 126, 138Organizational Impacts, 1

P

Payable(s). See Accounts PayablePeriod End. See Reporting

INDEX

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Posting(s):adjustment(s), 2cleared, 7–8, 11, 22–24, 26, 30, 42,

80, 92, 122, 134, 171, 173, 175, 176clearing, 10, 22–23, 174, 177, 183create, 9, 31, 43, 81, 93, 123, 135currency adjustment, 2date, 2–3, 10, 32, 43, 82, 93, 124, 135,

188foreign currency, 3–5, 22, 164foreign currency, balances, 8gain/loss, account, 11, 19–21, 24–25,

116gain/loss, postings, 2, 3, 8, 26, 28, 77,

119, 173–175, 187–188gain/loss, realized, 10, 11, 113, 166,

171, 173gain/loss, unrealized, 7, 29, 79, 121incremental, 8, 12, 77intercompany, 11, 173keys, 29, 79, 121line item, 2, 24, 26original, 1, 3, 10–11, 23, 27, 29, 57,

60, 64, 79, 100, 110, 121, 171–172,177, 188

period, 32, 43, 82, 93, 124, 135reverse, 31–32, 43, 81–82, 93,

123–124, 135–136reversal, date, 32, 43, 82, 93, 124, 135reversal, period, 32, 43, 82, 93, 124, 135reversal, posting, 31–32, 42–43, 79,

81–82, 93, 121, 123–124, 135summary, 24transaction (al), 2, 24variant, 179, 181

R

Receivable(s). See AccountsReceivable(s)

Reconciliation Account(s). SeeAccounts

Reporting:balance sheet, 2–5, 8consolidated equity, 4consolidated statements, 5equity section, 2expenses, 2–3financial statement(s), 1–2, 4, 35, 47,

85, 97, 127, 139, 188–189financial statement(s), consolidated,

4income statement(s), 4, 12liability(s), 2, 5, 7net income, 2, 4–5net investment(s), 2, 4–5other income, 5period-end, 3–5, 7, 10, 12period-end, balance, 2Profit and Loss (P&L), 2revenue(s), 2–3shareholder’s equity, 5, 187

Revaluation:cumulative, 10, 27, 29, 41, 52, 57overview, 7, 9, 11, 17postings tab, 31, 42, 60, 64, 68, 72,

81, 92, 123, 134revaluated, 1–4, 8–9, 11–12, 17–18,

24, 26, 29–30, 33, 38, 41, 44–45,52, 54, 57, 60, 62, 64, 68, 70, 72,77, 79–80, 83, 88, 91, 94–95, 103,105, 108, 119, 121–122, 125, 130,133, 136–137, 145, 150, 170–173,174–176

revaluated amount, 1, 91, 133revaluation, 1, 19, 21, 28, 30, 42, 78,

80, 92, 113, 120, 122, 134, 145,153, 164, 166–167

type “10”, 7, 27, 29, 30, 36, 47, 49, 52, 58, 60, 66, 68, 74, 171, 188

type “10”, with translation, 77, 79–80, 86, 91, 98, 100, 103, 110,115, 119, 121–122, 128, 133, 140,142, 145, 152

INDEX

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196

Revaluation (cont.):type “30”, 7, 27, 41–42, 49, 57–58,

64, 66, 72, 74, 77, 91–92, 97–98,100, 108, 110, 116, 119, 133–134,140, 150, 158, 170–171, 188

valuated balance(s), 77, 119Revenues. See Reporting

S

SAP R/3, 9–10, 34, 46, 84, 96, 126, 138SAP Note(s):

SAP Note No. 312884, 167, 185SAP Note No. 315155, 166, 185SAP Note No. 335608, 158, 185SAP Note No. 441333, 33, 45, 95,

125, 137, 185SAP Note No. 448306, 77, 185SAP Note No. 545032, 161, 185SAP Note No. 548946, 166, 185SAP Note No. 692693, 77, 185SAP Note No. 87538, 31, 43, 81, 93,

123, 135, 185SL Extra, 34, 46, 84, 96, 126, 138Spot Rates. See Exchange RatesStock Transfer, 7, 11

T

Table(s):BKPF, 158BSAS, 21BSEG, 11, 21BSIS, 11, 21, 113, 155GLT0, 21–22TCURR, 159V-T030, 145, 153V-T030H, 9, 77, 113, 119, 166–167,

170V-T030HB, 9, 79, 113, 119V-T030S, 166–167, 170

ZSPLT, 21Tax Impact, 7, 12Transaction Codes:

F.05, 9–10, 28, 78, 120, 163, 174, 183F.06, 9F.13, 10, 183FBL1N, 25FBL3N, 24–25, 39, 50, 55, 89, 101,

106, 111, 131, 143, 148, 153MIGO, 33, 45, 83, 95, 125, 137OB59, 29, 79, 121, 161, 183OBA1, 22, 29, 79, 115, 121, 167, 169,

183OBA7, 29, 79, 121, 164, 183OBY6, 12, 183OBYC, 11, 183OBYY, 12, 183OC41, 3, 29, 79, 121, 183SE38, 25SM35, 31, 38, 43, 49, 54, 58, 62, 66,

70, 74, 81, 88, 93, 101, 105, 111,123, 130, 135, 142, 147, 152

Transaction Date, 3, 188Transaction Gain/Loss. See Posting(s)Translation:

date, 2, 11, 171, 177differences, 5, 114group, 11, 114, 156currency, 1, 3–4, 7–8, 17, 174–176adjustment, cumulative. See Account,adjustment, currency, 188

V

Valuate(d):amount. See Amount,cumulative balance, 34, 38, 45, 49,

54, 58, 62, 66, 70, 74, 84, 88, 91,95, 100, 105, 110, 126, 130, 133,137, 142, 147, 152

G/L account open items, 33, 44, 83,94, 125, 136

INDEX

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197

G/L account balances, 33, 44, 83, 94,125, 136

P&L accounts, 33, 45, 83, 95, 125,137

period balance, 34, 45, 84, 95, 126,137

open items, customer, 34, 45–46, 84,96, 126, 138

open items, vendor, 34, 45, 84, 95,126, 138

Valuation:valuation, account balance, 31, 43, 81,

93, 123, 135valuation, balance sheet preparation,

8, 31, 42–43, 81, 92–93, 123,134–135

valuation, cumulative adjustment, 38,49, 54, 58, 62, 66, 70, 74, 88, 100,105, 110, 130, 142, 175, 152

valuation, differences, 11, 34, 46, 84,96, 126, 138

valuation, method(s), 30, 42, 49, 58,66, 74, 80, 92, 100, 110, 113, 122,134, 152, 155, 159–163, 165

valuation, area(s), 9, 11, 17, 30, 36,42, 47, 77–78, 80, 86, 92, 98, 113,115–117, 119, 122, 125, 127–128,134, 140, 156, 166, 185

valuation, local currency, 30, 49, 58,80, 115, 122, 162

Valuation Methods:always valuate, 161–162balance valuation, 163corp group-vendors/customer, 163credit balance exchange rate type, 163debit balance exchange rate type, 163determine exchange rate type from

account balance, 163document type, 163exchange rate hedging, 164exchange rate type from invoice

reference, 163g/l valuation group, 163lowest value principle, 162minimum difference for display in

foreign currency valuation, 164post per line item, 163reset valuation run, 162revalue only, 162strict lowest value principle, 162write extract, 163

Vendor:vendor. See Accounts Payableopen items. See Open Items,payables. See Accounts Payablereconciliation account. See Accounts

INDEX

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sap foreign currency revaluation

Documents

split ledger

exchange ratesgbpeur

group reporting

split ledger

batch input

perform transfer

fixed asset

exchange rate