Foreign currecny valuation

Question

Hello experts,
I have a small doubt reg FCV.......
i have posted an inv for rs.50,000/- on 10.05.2008 and I am paying this inv on 20.05.2008 for the same amount
Parameters maitained: GL open item mgmt, forex table etc., and also defined valuation method, account determination etc.,
Now i want to valuation for this scenario...how? and in F.05 what should we need to maintain? what are the entries system will generate?
could anybody share your thoughts please. Will assign good points
thanks
anita

Answer 1

Hi Friend,
In the given scenario, you no need to run any F.05 or any other foreingn currency valuation transactions.
The foreign currency only comes into picture for open items on the month end, But where as in your case you are paying on 20 th itself.
So on the date of payment system checks the exchage ratio from table and if gain or loss will be posted to the predefined a/c.
In your example you have not given any foreign currency. If I take your exple as Local currency as INR and Foreign currency as USD.
If you post an invoice for 50000 USD  on 10th and Rate is 40 on that date
The invoice entry would be
                                          INR                    USD
       Vendor a/c       Cr        2000000              50000
        EXp or GR/IR   Dr        2000000              50000
On the date of payment i.e on 20th if exchange rate is 41
                                         INR                    USD
       Vendor a/c        Dr       2000000              50000
        Cash/ Bank      Cr       2050000              50000
        Exchage loss    Dr         50000
There wont be any entry in Foreign currency, but only the difference will be posted to Exchange gain/Loss a/c configured in the followign node.
SPRO -
> Financial Accounting (New) -
> Accounts Receivable and Accounts Payable--->  Business Transactions ->  Outgoing Payments---> Define Accounts for Exchange Rate Differences.
Please reply for any clarifications............
Thanks & Regards
Ravi C