Valuate Foreign Currency in the Period End

Hi Friends,
Which method is used to Valuate Foreign Currency in the Period End? (We used Average Rate method at the time of transaction posting) I have a doubt whether we have to use same average rate method at the period end or not.
Thanks
Chandra

My Dear Friend,
OB08 is a master data screen..rates are entered there by the user against the particular echange rate type for different currencies..So whatever you enter there, you will see that..highere or lower depends on what rates are given by the bank.. if it is higher you will maintain and see higher and if it is lower you will maintain and see lower..
Secondly, if you want to use the concept of revaluation at the bank buying rate and the bank selling rate, then you will first have to define two exchange rate type for that and also maintain that in the config for valuate - Foreign Exchange.. and against these exchange rate types, you have to maintain the bank buying rate and bank selling rate in OB08.
Regards,
SAPFICO

Similar Messages

Foreign Currency Translation at Year End - How SAP Works for P&L items?

Hi All,
I wanted to know "How SAP works on Foreign Currency Translation at year end" from Local Currency to Group Currency for P&L Items.
I know how SAP works for Balance sheet items but am really confused with when the translation was done for P&L Items.
Configuration:
We are on ECC 6.0 . Local Currency is CAD and we have 2nd Local Currency as "USD - Group Curr".
We have set up Valuation Method - 4
We have set up Valuation Area - 40
For Account Determination for Currency Translation, GL accounts (Loss, Gain and B/S Adj) were setup for the combination of Chart of Accounts, Val Area and Fin Stmt Ver.
Sales Account Balance
CAD (LC)        USD (2nd LC)
1000                   920
Using tcode "FAGL_FC_TRANS", we translated our P&L items.
Local Currency is CAD and Group Currency is USD.
CAD 1000 and USD 920 are cumulative balances over a period of time.
Since at the end of year CAD became stronger, exchange rate is 1.11 as an example
Sales Account Balance
CAD (LC)        USD (2nd LC)        Translated Value in USD
1000                   920                        900
System passed the following entry in USD:
Debit Balance Sheet Adj A/c 20
Credit Translation Gain / Loss A/c 20
Here are the questions:
1. How does over all translation work? - Should we get any Gain / Loss and have an effect on P&L when all accounts (P&L, B/S) are translated?
2. How can there be a gain entry when USD value has really fallen from 920 to 900 in the current case.
Thanks for your time.
Vijay

Hi,
I had this issue too. The entry was just opposite to what it should be. I just flipped the accounts in table FAGL_T030TR.
Example: 410000 is sales account which normally should have a credit balance. Here are some entries that were posted to sales in 03/2009 and I am running FAGL_FC_TRANS at the end of the month.
March 1, 2009 Cr. Sales CAD 1000- USD 900-
March 2, 2009 Cr. Sales CAD 500- USD 480-
During FC translation transaction, system takes the balance in the account for the period (if you execute it with 'Val. period balance only' checkbox checked) and not the cumulative balance. SAP recommends translating period balance only (and not cumulative balance) for P&L accounts. It sees a balance in LC (this again depends on the config. you have in OB22 - whether the indicator is 1 (TC as source currency) or 2 (LC as source currency for translation)) which is 1500, converts that at month end rate. After conversion, lets say the balance is 1400-.
In this case, we expect a credit entry on sales account
March 31, 2009 Cr. Sales CAD 0 USD 20-
But system was just posting the opposite. I then flipped the accounts in FC translation configuration. I know it is misleading. In that configuration, system says balance sheet adjustment account, but what you should actually give there is your gain/loss account. Our gain/loss a/c. falls in the same GL account range as the main account. For example, for 410000, it is 410999 and for 510000, it is 510999. We report accounts 410000 to 410999 in the same node in the FSV.
Pl. feel free to ask further questions about this. Pl. test in your system and correct me if my above reply is wrong.
Cheers!

Valuating Foreign Currency, Err Msg:Required Currency Type 11 Not in Ledger

Dear Experts/Moderator,
When valuating Foreign Currency using FAGL_FC_VAL, error message displayed "Required Currency Type 11 Not in Ledger". Can any one explain the reason for the error and provide solution.
Thanks
Chandra

HI,
did you make a SAPNET search? See SAPNET Note 1115199 for details.
BR Christian

Is it possible to undo or reverse the Period End Closing Utility

I have a client that ran the Period-End Closing Utility. Then a week later ran it again. Is it possible to undo or reverse the second mistaken operation of the Period-End Closing Utility?

Hi,
It is not possible to Automatically Reverse the Period End Closing performed.
You can try the option of Manually cancelling every transaction involved in Period End Closing in the COPY of the database to check if it helps.
Kind Regards,
Jitin
SAP Business One Forum Team

Automatic Posting of All Open GR/IR A/c at the period end

Dear Experts,
We have a requirement for IT Act Provision.
1. All Open Credit Purchase documents(for which MIRO has not been done) to be automatically transferred to a A/c called Current Liability & Provision(Clearing Account) on the last date of the period(Month end)
On the first day of next period all such open credit purchase documents line items to be created in GR/IR Account against which users can do MIRO when invoice is received.
2. All open Debit GR/IR line items to transferred to Advance A/c (Clearing A/c) on the last date of the month and again to reversed line item wise to GR/IR account.
What is the settings to be done please advise.
Regards,
Alok

Dear Mr Obviar,
Thanks for you reply,
In that OBYP setting:- there are three columns:-Recon A/c -
Adjustment A/c -
Traget A/c
Please correct me if I am wrong:-
I want GR/IR credit to be transferred to some Clearing A/c
then I shall put GR/IR GL code under Recon A/c
and Clearing A/c GL code under Traget A/c
What shall I put under Adjustment A/c
Please extend your help.
Regards,
Alok

FOREIGN CURRENCY REVALUAITON

HI,
When we do foreign currency at the month end on 31st, it's posting entries. But for reversing it is posting in the first day of the next month, but next month will not yet opened.
thanks and regards
msr

Hi,
You will have to do this transacation at the begining of the month, since your problem will get solved.
Tcodes for this transaction F.05 & F-05
Thanks,
Srinu

Foreign Currency Valuation - GL at the time of clearing of open items

Hi experts,
We valuate the open items (Balance sheet items) in Company Code Currency without checking the reversal option.
At the time of clearing of these open items, the GL used for reversal of the valuation difference is been different.
GL mapped in OBA1:
Exch.rate diff realized
Loss/Gain: 716000
Valuation: Loss/Gain - 716001
Bal.Adj 1: 101699
Translation:
Loss/Gain: 716000
Bal.sheet adj -Loss/Gain: 716001
At the time of clearing of open items:
The entry which is getting passed for the reversal of the valuation difference is some time posted to GL: 101699 and sometime to GL 716000. The off-setting GL been Clearing GL(which is been valuated).
Could someone kindly through some light as to why the system behaving in such a way. We expect the GL at the time of reversal to be 101699.
Thanks in advance.

Hi Pradeep,
The principle of foreign currency revaluation works as follows for the open items like AR, AP and Bank Balances:
At the period end the system revaluates the open items (or balances, as the case may be) with the period end exchange rate and thus posts the difference between the original exchange rate (at the time the open item was created) and the period end rate. This could be loss or gain due to revaluation. One side of the entry is P&L (7...account) and the other side is the balance sheet (the balance sheet account typically comes from AR, AP or Bank/Cash range).
This loss or gain is not realized since at the period end the open item is still out there. When you clear the open item, the loss or gain due to the latest exchange rate is realized immediately and is posted to realized loss or gain, with an offset to the original balance sheet account.
I hope the above helps.
Sharabh

Foreign Currency valuation at Year End

We have a number of Imprest cash accounts in Foreign Currency. The currency balances have to be revaluated at the Exchange rate prevalent on March 31.
Can someone please let me know the configuration process & related t-codes.
Correct answers will be rewarded points.
Regards,
K Chithra

Hi,
currency revaluation can be managed with TA F.05 (TAB GL-Balances/Valute GL-Balances and enter the account(s)).
Just check whether it's usefull for you, test with valuation method KTO and a single account.
You can define your own valuation method for currency revaluation (IMG Financials - General ledger accounting - Closing - Valuate - Foreign currency revaluation.
Currency revaluation works in my experience excelllent...
Best regards
Horst
Edited by: HorstRn on Jun 11, 2008 7:56 AM
@ PARA
F.05 valuates not only open items....... Bank accounts or cash accountsnormally have no open items.

Why foreign currency valuation is required ?

Hi.
I just want to clear my doubt. If we deal with foreign vendors or customers like vendor invoice is done through USD or EUR or GBP but payment is not made till now or customer invoices are done but payment is not received from them in month of August. In that case if we run foreign currency valuation of open vendor invoices and open customer invoices on 31st August it will generate accounting entry and next day i.e, 1st September accounting entry will be reversed. So my question is we have not received from customer and we have not paid to vendor, invoices are still open from customer and vendor side. So if we run foreign currency valuation what will be its actual effect in the business and if we not run foreign currency valuation what are the problems may arrises because later if we pay to vendor through foreign currency then actual loss / gain effect will arrise in our business scenario.
Kindly give me reply.

hi
As part of the period end process, and in anticipation of creating a period-end financial statement, all accounts held in foreign currency and all foreign currency open items must be re-valued at the period end rate. There are two tools within the SAP ERP Packaged Solution for this purpose:
Foreign Currency Revaluation u2013 Balance Sheet Accounts: The program selects every balance sheet account, typically cash accounts, that is held in a foreign currency and re-values the total balance at the currently valid rate. Any (sterling) exchange rate difference is posted to a realised gains/losses account.
Foreign Currency Revaluation u2013 Open Item Accounts: Open item accounts managed in GBP, such as debtors and creditors, may contain foreign currency transactions. The program will individually revalue each open item to determine an overall unrealised foreign exchange gain or loss position. The realised exchange rate gain/loss is posted when the transaction is cleared.
It is a statutory requirement to meet hte FAS52 and GAAP requirements
thanks
Srilaskhmi

Valuation of open items in foreign currency

Hello,
Have an issue in using the f.05 tcode, valuation of open items in foreign currency. I created two invoices in foreign currency for the previous period and with low rate. The OB08 has been updated as well with higher rate for the foregn currency. However when I lauch F.05 program it can't find any invoice to reevaluate (list empty). Any idea why?
Thanks!
SB

Hi
In F.05 under 'Open items' or 'G/L balances' select the type of accounts (G/L, Vendor, Customer)
Thank You,

Foreign currency valuation (new) for vendors and costumers open items

Dear friends,
Is there any option that when i run the foreign currency valuation program (fagl_fc_val) for vendors and costumers open line items not to generate the reverse posting? I have read in the sap library that the reverse posting is optional and the when you pay the invoice the system works the difference out between the valuation and the exchange rate of the payment, but i can not find it in customizing.
thanks in advance
marc

I also like to add that it is best to post reversal because normally the revaluation entry is posted on the last date of the month and the reversal entry is posted on the first day of the following month, which means that the following month will have a new entry on the last date independent of the entry made in the prior month.
The idea of posting the valuation entry is to value the customer and vendor open items which were posted (let us say 3 months ago in a foreign currency) with the latest exchange rate as of the end of the month. This way these payables and receivables stand corrected.
Is there any reason why you don't want to post the reversal entry?

Create items by vendor and customer on Foreign Currency Valuation

When we execute Foreign Currency Valuation, we would like to create items in a document by vendor and customer.
Can we handle it a 'Corp.group-vendors' flag(Evaluate Accounts According to Group Definition) ?
Can you help with this issue please?
Thanks,
Sato.Ishikawa

HI,
With the report SAPF100, you will be able to valuate foreign currencies
from customer and vendor accounts.
It is not possible to post a foreign currency valuation directly to a
vendor or customer account. This is only possible for g/l accounts.
You can refer to the following workarounds:
From the technical point of view you can use FB01 to post such a posting
You have to enter a exchange rate manually in the first screen. In this
case this exchange rate is used instead of the exhange rate of table
TCURR (transaction OB08).
You have to choose a exchange rate which transfer the amount in local
currency to 0,00 in foreign currency.Another possibility is to use
RFBIBL00 in transfer type direct input for FB01.An amount of 0 in
foreign currency should work.
The system is designed not to post documents with 0 amount in foreign
currency to vendors/customers.
Reg
Madhu M

Please help - Foreign currency valuation

Hi,
I have a query about foreign currency valuation
As per my knowledge, when we run F.05 for foreign currency valuation, it valuates the open items in foriegn currencyand reverses them the next day.
so the original invoice will not have any valuation difference
( more data > valuation diff) will be zero.
NOW, if the invoice has valuation diff what does it mean?
Please help me on this....
Regards,
Jay

Below information may be useful to you-
You have the following options for valuating open items in foreign currency:
Saving the exchange rate difference per document
You can define that in addition to being posted, the exchange rate differences are saved per document. This information is then available for subsequent evaluations, for example, Transferring and Sorting Receivables and Payables
To do this, select the indicator Valuation for FS preparations on the Postings tab.
The exchange rate differences saved in the document are taken into account for payment clearing:
Unrealized exchange rate differences
When you valuate open items in foreign currency, the exchange rate difference determined is posted as an unrealized exchange rate difference.
Realized exchange rate differences
For an incoming payment, that is, when you are clearing the open items, the current exchange rate is determined. The unrealized exchange rate difference determined from the line item is taken into account.
If the first valuation results in an exchange rate difference of 30 DEM, and the current valuation results in an exchange rate difference of 10 DEM, an exchange rate difference of 20 DEM is posted and 10 DEM is saved in the line item as the final valuation difference.
Reversing exchange rate difference postings
You can define that the exchange rate differences posted are automatically reversed one day after the valuation run by an inverse posting.
You therefore have the option of determining exchange rate differences at any point in time without this valuation being taken into account for the creation of financial statements or for payment clearing.
To do this, select the indicator Reverse postings on the Postings tab.

Difference between Foreign Currency Valuation & Translation

What is the difference between Foreing Currecy Valuation (FAGL_FC_VAL) & Foreing Currency Translation (FAGL_FC_TRANS) ?
help.sap.com

Hi,
Foreign currency valuation FAGL_FC_VAL is a place where we valuate the foreign currencies to the particular local currency and post the differences to either exchange loss or gain.
Foreign currency translation helps us to transalte the forein currency to loacal currency with out calculating the gain or loss derived from exchange.
Parallel currency can be valuated in T-cd:FAGL_FC_Trans.
Thanks,
Shilpa.A
Edited by: ashilpa54 on Mar 22, 2011 9:37 AM

FIFO valuation at period end + consideration of valuation type

Hi,
I use FIFO valuation to valuate my raw materials at period end.
Some raw materials are split valuated, e.g. the same material number can have valuation type NEW or REP (repaired). All material movements (e.g. goods receipt) happen for each valuation type at different cost (REP is much cheaper than NEW). Also purchase orders are created at movement type level.
Unfortunately FIFO valuation does not work based on valuation type. Thus the FIFO value can be a wrong mixture of valuation type values for each material.
Example: Starting with zero quantity/value at period begin
Posting date
Movement type
Valuation type
Quantity
PO-Value/MAP
05.07.2014
101
NEW
500
500 EUR
10.07.2014
101
REP
1000
100 EUR
15.07.2014
261
REP
-500
-50 EUR
Total at period end
1000
550 EUR
The stock value of this 1000 items is 550 EUR, the 500 items NEW have a value of 500 EUR, the 500 items REP have a value of 50 EUR.
FIFO result:
The 1000 items at month end are FIFO valuated based on the last goods receipt happend on 10.07.2014 which is exactly 1000 items (not considering the different valuation types).
Thus the FIFO value is only 100 EUR although the correct value should be 550 EUR.
I didn’t find a solution in SAP standard (FIFO related table MYMP does not contain BWTAR (valuation type) whereas table MYMFT does but its always empty in my case), but is there a solution for that case, maybe I missed it in some EhP’s?
Best regards, Christian

Hi,
There is no such normal MRP run.
Whenever we take MRP run, system will consider only the main material and not the split valuation type.
THe main concept of using split valuation is only for that itself. It is there for planning irrespective of valuation type.
But if you want the system to behaive in such fashion that it should plan one part and not he other then use different material code instead of split valuation. Define these two material codes as alternative and give the usage probability as 0% and 100%. MRP will consider only that material which is having 100% usage probability.
Regards
Amit Parkhi

Valuate Foreign Currency in the Period End

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