Valuation Methods - foreign currency valuation

Hello
I am trying to understand the concept of different valuation methods. could you explain using examples please ?
Say for instance, a goods receipt is raised in USD for 100USD on 2 Jan 2009 and local currency is EUR. Exchange rate is 1EUR : 1,5USD. On 4 Jan 2009 invoice received at rate of 1EUR : 1,6USD.
What are the implications of the options lowest value principle, strict lowest value principle, always valuate and revalue for such a transaction?
tks

Those are different ways of valuating your Foreign Currency Operations depending or the country regulations:
1- Lowest value principle means that the Valuation will be posted only if it is giving a negative result.
2- Strict lowest value principle will be post valuation only if two conditions happened:
A - The valuation is negative
B - The new valuation has a greater devaluation and/or a greater revaluation for credit entries than the previous valuation
3 - Always Valuate: No matter if it is possitive or negative, the valuation will be posted.
4 - Revalue only: The opposite of the first one, valuation is only posted when possitve.
5 -Reset Valuation Run: In this case open items are valuated at the acquisition price. This way the valuation difference is set to zero. This is useful to reset previous valuations
Regards,
Fede

Similar Messages

Foreign Currency valuation- balance sheet preparation valuation

Hi,
I have a doubt in foreign currency valuation.
When we tick Balance sheet preparation valuation ( in t-code F.05), no reverse postings are generating, eventhough i tick reverse postings. why is this happening?.
What is happening when we use Balance sheet preparation valuation in Foreign currency valuation?
Thanks,
Vinay

Vinay,
Yes as explained earlier it converts balance sheet from one( Local) currency to Another (foreign) currency on a particular date.
For example if your balance sheet currency is EUR and your foreign currency is USD. It will convert EUR into USD on that particular date on all open items and post it to
the expense and revenue accounts for exchange rate differences from valuations. For payable and receivables accounts you must also define the financial statements adjustment accounts.
This is what it happens check your own thread
http://scn.sap.com/message/14258690#14258690
Best regards
Hrushikesh

SD invoice can't be reversed due to foreign currency valuation

Hi,
I have an invoice which relates to an Sales order,it was posted in several months again(cross monthly closing). Now I want to reverse this invoice,but the system can't cancel the relevant FI document due to we have done the foreign currency evaluation at last month end.
The error message as:
===========================================================================
Reversal of document 0220v1 1100004518v2 2009v3 not possible in FI
Message no. F5A005
Diagnosis
Item &v4 in accounting document 0220 1100004518 2009
was valuated with an open item foreign currency valuation.
System Response
Document cannot be reversed.
===========================================================================
How can I accomplish this job?
Any input is appreciated.
Thanks,
Don

Hi Mike,
Reset the Foreign currency valuation run? I am not sure about your suggestion. Does it means that I just key in the "reversal posting date" and "reverse post.peried" and don't key in "Document date","Posting date" and "Posting period",it is right? And then how to check the document being reset or not? (Just check if there have the document or not,when test run.)
Or I need to select a reset valuation method?
Thanks,
Don

11i valuation of foreign currency expenses

Hi everyone,
The Polish Legal requirement of valuation of foreign currency expenses is to value of these expenses and exchange rate differences at currency cost layers (by historical rates), not at current exchange rate!
It works exactly the same as material transaction costing, that is foreign currency expeses are valued:
1) at FIFO (First in, First out),
2) at LIFO (Last in, First out),
3) at Average (average value).
Each company have to choose an method of valuation for his foreign currency expenses.
Example:
1) Foreign currency is USD, functional currency is PLN
2) current balance of USD account = 1,000USD, PLN account = 2,338.00PLN
where:
- 600USD x 2.35PLN/USD(ex rate) = 1410PLN
- 400USD x 2.32PLN/USD = 928PLN
2) The company applies FIFO costing for valuation his foreign currency expenses.
So, for example, 800USD payment has to be valued as following:
800USD = 600USD x 2.35PLN/USD + 200USD x 2.32PLN/USD
So, question:
Do You know any functionality in 11i in GL, AR, AP or CE module that allows us to value the foreign currency expenses like above?
Maybe, do You have any experience with it?
I will be grateful for any solutions.
Thanks a lot.

Hi Ajay,
Kindly advise on how to do the config. We need to separate the AR and AP adjustment only for the unrealized Forex/Gain or Loss.
But looking at the screen in OB09, there's only 1 field for the bal.sheet adj.loss and another field for the bal.sheet adj.gain.

Foreign Currency Valuation not posted to GL account

Hi,
While I run foreign currency valuation even tick on check box of Create Posting button under FAGL_FC_VAL it show me summary report and posting tab it show me properly Debit/Credit entry on last day of month and 1st of month it become reverse as usual. But while I go through respective GL account of "Forex Unrealised Profit" and " Foreign Exchange Adjustment" account in FBL3N it does not show me line ietms result after running foreign curreny valuation. It should show the result in respective GL accounts where line items are tick in each GL accounts and valuation method I use EVR(always valuate). Why it is happening ?
Best Regards,
Anindita

Hi,
After executing FAGL_FC_VAL, do you execute Batch Input Session in SM35. If no then
When you execute FAGL_FC_VAL you will find the field called Batch Input Session name where you have to give a name for e.g. FOREXVAL. Once you execute it then system creates Batch Input Session in SM35. So go to SM35 and select the session FOREXVAL and click on Process icon seen on the top and select Display errors only and press ok.
Regards,
Chintan Joshi.

Intercompany payment posting after Foreign currency valuation - F.05

Hi Gurus,
I have an issue with intercompany payment posting after foreign currency valuation run.
Build Up:
Let me give you a brief description first. Company u2018Au2019 has open items from Company u2018Bu2019. Basically Company u2018Au2019 charges management fees from Company u2018Bu2019. Both companies have a local currency of u2018EURu2019 and a group currency of u2018USDu2019. The open items posted in company u2018Au2019 have been accumulating for two years now. In January of this year finance decided to run the foreign currency valuation (F.05). The method they used was the reversal method. So at the beginning of the next month the entries from the valuation were reversed. They repeated this in February as well. Note this is the first time the foreign currency valuation was performed in SAP, before it was done manually. After February they never ran the foreign currency valuation run.
Issue:
Now what is happening is, when open items that have been accumulating for over two years and are before the foreign currency valuation run are cleared (payment is made) there is a exchange rate loss/gain. When the open item is cleared there is posting to the G/L account for Balance sheet adjustment and also an exchange rate loss/gain G/L account.
Posting:
Debit u2013 Cash
Credit u2013 Customer (intercompany)
Credit u2013 Balance sheet adjustment account (unrealized loss)
Debit u2013 Profit and loss account (realized loss)
The balance sheet adjustment account that is posted to is from OBA1 u2013 KDF u2013 balance sheet adjustment account in the foreign currency valuation accounts. Currency translation account determination is empty in OBA1.
I understand the system while payment posting is clearing/offset the unrealized loss/gain and posting the realized loss/gain. But how is this possible, when the foreign currency valuation run was done the entries were reversed so there was no unrealized loss/gain posted.
Also another caveat: Isnu2019t foreign currency valuation for open items that are posted in foreign currency and need to be revaluated to local currency. Well that is what is puzzling the open items posted in company u2018Au2019 are posted in local currency u2018EURu2019 so the foreign currency valuation should not affect these open items, correct? And if this is true then when the open items is cleared the unrealized loss/gain should never be cleared since there is none posted the exchange rate difference should only be posted to the realized account in the profit and loss correct? Please help? I can explain further if needed?
Thank you.
Comments and facts:
Companies fiscal year is June u2013 May.
Company u2018Au2019 and u2018Bu2019 have a local currency of u2018EURu2019, group currency is u2018USDu2019
The invoices in Company u2018Au2019 were posted in u2018EURu2019
The foreign currency valuation was only ever run in January and February of 2010.

HI ,
I believe becuase you did not enter any date that's why they did n't reverse automtcially . You need to enter to reverse.
now you can use f.80 mass reversal for all of them
Many Thanks

Foreign currency valuation process.

Hi Gurus,
I need some help on foreign currency valuation. Can any one explain the in detail the process of month end open item valuation. I need to valuate an open item account which is in JPY and the company code currency is HKD and group currency is USD. I have to perform both remeasurement(transaction currency to functional) and translation( functional to Group). I need step by step guidance.
Thanks in advance,
Prashanth.

hi,
for valuating foregin currency valuaqtion, you need to prepare
1. automatic postings for foregin currecny valauation(FCV) by to code. oba1- double click on exchange rate key and assign the relevant chart of accounts and G/L accounts.
2. after that you have to create valuation methods in OB59
assume you have posted invoices with foregin currency,
enter the present currency rates in exchange rates, then run the FCV in f.05, after executing select the posting button, it will process the posting.
thing is you should decide whether it is year end or monthend.
let me know further clarifications,
regards,

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.

Foreign Currency valuation accounting entries

Dear friends
At the time of revaluating foreign currency at period end, an accounting entry gets generated, which is reversed on 1st day of the next period. As per my understanding, the entry is as below -
Forex Loss Dr
Vendor Adjustment A/c
My question is whether the Vendor adjustment G/L is a Recon a/c? Also, in what transaction code, this customization is done?
Thanks in advance
Amit

Hi,
Please check all your settings correct or not?
Step1: Forex Rates should be maintained OB08
Step2: Define Valuation Methods
Step3: Define Valuation Areas
Step4: GL Account Creation for Forext Loss and Gains,
Step5: Assign GL Acconts
Step6: Foreign Currency Valuation T Code: FAGL_FC_VAL
Thanks
Chandra

Reverse Foreign Currency valuation

Hello,
Does Anyone know how to reverse a foreign currency valuation. I basically ran a foreign currency valuation with a wrong date and the valuation posted some data which is junk. I need to reverse this data. Is there any way of reversing a Foreign currency valuation SAPF100.
Thanks for your help
Keyur

Keyur,
I found in a couple of other posts in the forum that the only way to reset a valuation in classic GL is to have a valuation method (OB59) with Reset radio button and then run F.05 with that valuation method and the 'Balance Sheet preparation valuation' checkbox checked in the postings tab of F.05 transaction.
Here are the links to those posts.
https://forums.sdn.sap.com/click.jspa?searchID=26963024&messageID=6885880
https://forums.sdn.sap.com/click.jspa?searchID=26963024&messageID=3339308
There are quite some more - all of them with the same resolution.

Reset of foreign currency valuation

Hi FI-experts
By mistake the foreign currency valuation program was executed. Does anbody know if there is a program that can reset the foreign currency run?
Or is there a manual work around?
Any help is appreciated.
Best regards,
Marco

Hi
It depends whether you have checked the box "Bal. sheet preparation valuation".
If you didn't select that option, you can just manually reverse all documents by "F.80".
If that option is selected, you have to manually reverse all documents by "F.80", and run another valuation method which has the valuation procedure in "RESET" (OB59) to remove posted FX difference amount in each valuated journal entry.
Regards,

Regrouping , Foreign currency valuation

Hi All,
Can anyone explain the use of regrouping(F101) and foreign currency valuation (F.05) ?

Hi Manisha,
Please find below mentioned the functionality of the reports.
F.101-This report groups the receivables and payables according to a required
list, for example, the "EU Guideline No. 4", and carries out transfer
postings.
Additional adjustment postings are necessary in the following cases:
o   Customers with credit balances and vendors with debit balances
o   Changed reconciliation accounts or partner (affiliated company)
o   Display of investments
All accounts that are managed on an open item basis are taken into
account.
Sorting of items:The decision as to whether an account is sorted according to receivables or payables depends on the financial statement value of an account. This is the balance of the account per reconciliation account and remaining
life. If several accounts are connected by the same trading partner, the joint financial statement value of the account group created determines
the type of sorting. If the balance is positive, the account is sorted
according to receivables, if the balance is negative, the account is
sorted according to payables. You define the sort methods required in
Customizing.Alternatively, several accounts can be summarized in a group whose joint balance is used for sorting. The definition for the corporate group is
used as group definition for customers and vendors. For G/L accounts,
there is a separate field in the G/L account master record.
For credit memos with an invoice reference, the due dates are taken from
the invoice.Vendors with debit balances and customers with credit balances are
determined separately for each point in the sorted list, since only
items with virtually the same remaining life may be balanced with each
other.
The documents are totaled under the current reconciliation account of
the customer or vendor master record. If the reconciliation account is
changed, the amounts are transferred from the old reconciliation account to the new reconciliation account.
Investments: In some countries (for example, France), investments must be displayed separately. You use parameters to select this additional display. The
investments are then displayed as a total per reconciliation account and
transferred.
Postings
For every transfer posting created, a reverse posting is also entered in
the session. For reconciliation accounts in the customer or vendor area,
postings are also made to an adjustment account.
If you use a target company code, all items are summarized under the
target company code and then processed. The company codes selected must
be managed in the same currency however (for example, local currency,
group currency).
If you use an alternative valuation area, account determination for the
transfer posting is carried out from the valuation area selected.
==========================================================
F.05- This program carries out the foreign currency valuation.
The following items/accounts are valuated:
o   Open items
o   Foreign currency balance sheet accounts. This means G/L accounts
    that are managed in a foreign currency.
You have the following options for the foreign currency valuation:
o   You can carry out the valuation in local currency or a parallel   local currency (for example, group currency).
You can use different valuation methods (for example, HGB or US
GAAP).
e result of the valuations can be stored per valuated document and
sted to adjustment accounts and P&L accounts.
ation process
lection
Open items:
The customer, vendor, and G/L account open items on the key date a
read and balanced by account or group and currency.
G/L account balances:
Reconciliation accounts and accounts managed on an open item basis
are not valuated. P&L accounts are only valuated as required: See
also: "FASB 52 Translation".
Grouping
The documents or balances are balanced by currency and account (or
group/valuation group). The exchange rate type for the valuation is
determined from this balance.
Valuation
o   Open items:
    The items that are untranslated at the key date are summarized per
    invoice reference or account/group.
    If the result does not correspond to the method selected, for
    example, if a profit arises using the lowest value principle, no
    valuation difference is output.
o   G/L account balances:
    The balance is translated per currency and account/group on the key
    date. The valuation difference determined is compared with the
    valuation method specified (for example, lowest value principle).
Hope this helps. please assign points.
Rgds
Manish

Foreign Currency Valuation for G/L Balances

Dear all,
Iu2019m facing the following problem.
Iu2019ve to execute the Foreign Currency Valuation (T-CODE: FAGL_FC_VAL) for the G/L Balances.
I have two items:
Item 1
Currency: USD
G/L Account: A483000006
New Difference after valuation: -100u20AC
Item 2
Currency: USD
G/L Account: A483000006
New Difference after valuation: -120u20AC
The result is : 1 postings with 4 items
A483000006 -100u20AC
Value Loss       100u20AC
A483000006 -120u20AC
Value Loss       120u20AC
The problem is that I would that the foreign valuation posting for G/L Balances should be done for the Cumulative balance of the G/L Accounts (for the same currency) and not for every items (like for open items):
A483000006 -220u20AC
Value Loss      220u20AC
Is it possible to modify the behaviour of the program?
Thanks in advance
Alberto

Hi,
Please check your valuation method settings, it has a option to do posting based on balance and disable/unselect post per line item.
Table V_FAGL_T044A
Regards
K.R

Foreign currency valuation for GR/IR clearing account is repeatedly posting

While executing foreign currency valuation (program SAPF100) through T code F.05 the following fields are selected for the spotted rate valuation for currency type 10.
A)     Valuate G/L account open items
B)     Evaluate GR/IR account (GR/IR clearing account is selected)
C)     Valuate customer open items
After execution the valuation postings are repeated in GR/IR FC valuation Balance sheet adj account while the postings in other accounts occur only once.
GR/IR FC valuation Balance sheet adjustment account is configured in OB09 for GR/IR account for respective currency type and local currency.
What could be the reason for repeated postings in FC valuation account?

I think there is some issue with the process, normally vendor/customer reconciliation account or some liability assets related account which has impact due to foreign currency rate changes needs to be revaluated. I don't understand why you have set up foreign currency valuation for GR/IR account, these are intermediatory account which reflects in system between for example GR and IR.
I also think that you need more information on foreign currency valuation, basically it happens on a particular key date and gets reversed on key date + 1, because revaluation is only required on a key date for reporting purposes. on the next day it get reversed and actual loss or profit on foreign currency only gets booked on realization.
Hope this helps!!!
Murlidhar Khatri

Error while running the foreign currency valuation

hello frnds,
i got the following error while running the foreign currency valuation.
No accounting principle assigned to valuation area
Message No.fr894
Diagnosis
In customizing the valuation area is not assigned to an accounting principle. You can use the accounting principle to define the general ledgers in which posting takes place.
System Response
Error msg
Procedure
Assign the valuation area to an accounting principle.
Above is the error message, but I created valuation area and assigned it to an accounting principle.
Guide me with some inputs.
Regards,
Siva

Hi,
Please check the following path
IMG > Financial Accounting (New) > Financial Accounting Global Settings (New) > Ledgers > Parallel Accounting > Assign Accounting Principle to Ledger Groups
Whether you have defined the Accounting Principles to Ledger Group?
Regards,
jigar

Valuation Methods - foreign currency valuation

Similar Messages

Maybe you are looking for