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:

Menu Path	Accounting ® Financial Accounting ® Accounts Payable ® Periodic Processing ® Closing ® Valuate ® Open Items in Foreign Currency
Transaction Code	F.05

2. Enter the following data:

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

3. Choose .

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.

4. Make a note of the document number.
5. Choose Postings.

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.

6. Choose until the overview tree appears.