Foreign Currency Translation
Purpose
This doc provides an outline of configuation and posting for FASB52 logic. It outlines the help.sap.com documentation in relation to
example. Please be clear this is only an example, customizing can vary based on your own legal requirements.
Overview
From help.sap.com documentation the following is stated on foreign currency translation
Currency Translation
Use
You can translate your account balances from local currency into group currency. The translation is performed in accordance with
FASB 52 (US GAAP) or IAS.
However, you can also perform the currency translation for other currency types.
Integration
In General Ledger Accounting, you can only perform a currency translation as part of the foreign currency valuation.
Prerequisites
You have performed a foreign currency valuation and have made all the settings for it in Customizing (see Foreign Currency
Valuation).
You have defined account determination for the translation in Customizing for Financial Accounting (New).
To do this, in the Implementation Guide for Financial Accounting (New), choose General Ledger Accounting (New) -> Periodic
Processing ->Valuate
-> Foreign Currency Valuation -> Define Account Determination for Currency Translation.
On the basis of the financial statement version, you can define different exchange rate types for each financial statement item and
thereby different exchange rates for the valuation.
Features
The account balances are translated from local currency into group currency.
Activities
To perform a currency translation, from the SAP Easy Access screen, choose Accounting -> Financial Accounting -> General
ledger/Accounts Receivable/Accounts Payable ->
Periodic Processing -> Closing -> Valuate -> Currency Translation of Balances.
In the general selection data, enter a valuation area (for translation into group currency, for example, enter the valuation area
with your group currency).
Example:
* Attention: This is just an example for FASB 52 represented in SAP. The functional/reporting currencies are FASB 52 terms.
.......................................................................................................................................................
OP
DC
LC (10)
LC2 (30)
[GBP]
[USD]
[EUR]
50
80
100
.......................................................................................................................................................
FAGL_FC_VALUATION
(Val.Area for curr. type 10)
Val. Difference
(*90) New amount after valuation
Posting
+10 remeasurement in EUR -> + 13
.......................................................................................................................................................
BALANCE:
90
113
.......................................................................................................................................................
FAGL_FC_TRANSLATION
(Val. Area for currency type 30)
Val. difference posting
90 Translation into EUR ->
0
(117)
+4
.......................................................................................................................................................
Sum:
90
Functional currency
117
Reporting currency
The functional currency does not have to be always the local currency (currency type 10 in SAP).
General Customizing:
Company code/Local currency = USD
Implementation Guide: Financial accounting (New) -> Financial accounting global settings (New) -> global Parameters for company
code - Transaction code OBY6
Additional Local Currencies
Implementation Guide: Financial Accounting (New) -> Financial Accounting Global Settings (New) -> Ledgers -> Ledger -> Define
Currencies of Leading ledger (Transaction code OB22)
OB22: The currency type 30 is defined as source currency = 2(Translation taking first local currency as basis),
otherwise the currency type 30 is not posted in the first step with the FAGL_FC_VALUATION (Remeasurement)
Exchange rate at time of posting invoice
Implementation Guide: SAP NetWeaver -> General settings -> Currencies
(check all settings)-> Enter Exchange rates (Transaction code OB08)
Create customer invoice via FB70 - Display posted invoice via FB03
Customizing for Foreign currency valuation
Implementation Guide:Finanical Accounting (New) -> General Ledger Accounting (New) -> Periodic Processing -> Valuate
Define valuation Areas
Prepare Automatic Postings for Foreign Currency Valuation
Select Transaction KDF, enter Chart of Accounts
Exchange rate at time of carrying out foreign currency valuation OB08
To perform a foreign currency valuation, from the SAP Easy Access Screen, choose Accounting -> Financial Accounting ->
General ledger/Accounts Receivable/Accounts Payalbe -> Periodic processing -> Closing -> Valuate -> Foreign Currency Valuation
(New)
Transaction FAGL_FC_VAL (Program FAGL_FC_VALUATION)
Valuation using valuation area which is assigned to currency type 10
Execute
Click on Postings button
To create valuation documents create postings must be ticked on, if you execute without create postings ticked, this means that
program is run in test mode.
If there are errors when posting, a batch input session is created (transaction SM35) Documents created view via FB03
Update run is saved in table FAGL_BSBW_HISTRY
The valuation difference of 10 posted in currency type 10 i.e. the difference between 50 GBP * 1.6 = 80 USD (exchange rate at time
of posting invoice) and (50 GBP * 1.8 exchange rate at time of valuation from currency GBP to USD) = 90 USD
The valuation difference of 13 posted in currency type 30 i.e. (the valuation difference is translated into the group currency 10 USD*
1.3)
Customizing for Foregin Currency Translation
Define valuation area
Valuation area for currency type 30
Define Account Determination for Currency Translation
In Financial statement item 1013200 in fin. statement version CAUS the following two accounts are present:
140000 (Rec. Account for customers)
140099 (Adjustment account for Rec. Account 140000, posted by FAGL_FC_VALUATION)
Accounts 140000 and 140099 should be defined together in the same financial statement item (ob58) so
that FAGL_FC_TRANSLATION posts the valuation
for both accounts together in the same account (defined in V_FAGL_T030TR, can be the same account 140099).
Foreign currency translation
To perform a foreign currency translation , from the SAP Easy Access Screen, choose Accounting -> Financial Accounting ->
General ledger/Accounts Receivable/Accounts Payalbe -> Periodic processing -> Closing -> Valuate -> FAGL_FC_TRANS (Program
FAGL_FC_TRANSLATION)
Execute
Click on postings Button
Generate postings must be selected on initial screen of FAGL_FC_TRANS for postings to be created Postings created view via FB03
Update run is saved in table FAGL_BSBW_HST_BL
