Friday, September 12, 2008

Valuating Open Items in Foreign Currency: Posting Exchange Rate Differences

Use

In this procedure, you valuate items in foreign currency at the end of a period in order to post gains or losses from currency valuations. To simplify the demo, you only run the program for an item you have just posted. That way, other IDES users can also go through the demo with their own documents.

If you ran the program for all open items in foreign currency, then all items posted to accounts that have open item management would be valuated. The valuation is carried out based on the individual value principle. Only individual items that are still open on the key date are considered for the valuation.

Prerequisites

The demo valuation method that is used for foreign currency valuation of open items is based on the lowest value principle. This means a valuation is only carried out using the lowest exchange rate. It might, therefore, be necessary to enter appropriate rates in Customizing before you post the vendor invoice. The following additional data is required for this example:

Field

Europe

North America

Date

01.09.1999

01.09.1999

Exch. rate type

EURX

EURX

From

USD

USD

To

EUR

EUR

Rate

1.07910

1.07910

Date

Last day of current period

Last day of current period

Exch. rate type

EURX

EURX

From

USD

USD

To

EUR

EUR

Rate

1.06910

1.08910

For more information about this process, see .

Procedure

  1. Call up the transaction as follows:
  2. Menu Path

    Accounting ® Financial Accounting ® Accounts Payable ® Periodic Processing ® Closing ® Valuate ® Open Items in Foreign Currency

    Transaction Code

    F.05

  3. Enter the following data:
  4. Field

    Europe

    North America

    Company code

    1000

    3000

    Evaluation key date

    Last day of current period

    Last day of current period

    Valuation method

    DEMO

    DEMO

    Valuation in curr.type

    10

    10

    Postings tab page



    Bal.sheet preparation valuatn

    Select

    Select

    Creating postings

    Select

    Select

    Batch input session name

    User name

    User name

    Posting date

    Last day of current period

    Last day of current period

    Selections tab page



    Valuate vendor open items

    Select

    Select

    Vendor

    1560

    4940

    Document number

    Document number from the previous transaction

    Document number from the previous transaction

  5. Choose .
  6. The system issues a list of the invoices you have posted in foreign currency. The translation rate and the rate used to valuate the amount are displayed. The furthest column to the right contains a valuation difference.

  7. Make a note of the document number.
  8. Choose Postings.
  9. The posting for the loss from currency valuation is:

    Debit ® Account 230010 (expense from currency valuation)

    Credit ® Account 161099 (foreign vendor receivables (adjustment account).

    For a valuation that does not affect the balance sheet, all postings are reversed on the reversal date.

  10. Choose until the overview tree appears.

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