Hierarchy
FI-CA (Software Component) FI-CA⤷
FI-CA (Application Component) Contract Accounts Receivable and Payable⤷
FKKB (Package) Contract A/R & A/P: Central Objects
IMG Activity
| ID | _FICAEURO_BEWGEWINNE | Report Valuation Earnings in the Dual Currency Phase |
| Transaction Code | S_KK4_74002426 | IMG Activity: _FICAEURO_BEWGEWINNE |
| Created on | 19990816 | |
| Customizing Attributes | _FICAEURO_BEWGEWINNE | Report Valuation Earnings in the Dual Currency Phase |
| Customizing Activity |
Document
| Document Class | SIMG | Hypertext: Object Class - Class to which a document belongs. |
| Document Name | _FICAEURO_BEWGEWINNE |
In this activity, you decide whether valuation earnings determined in the dual currency phase are to be stated immediately as relevant to the result or whether there should be a special item in the balance sheet stated as relevant to the result at the time of completion.
Lendings, receivables and payables are to be calculated and translated with the fixed exchange rate on the key date following December 31, 1998 in year-end closing.
When exchange rates are fixed, revenues and losses from foreign currency receivables and payables are also fixed regardless of the remaining term. As a result, revenues and losses can be considered to be complete even if the settlement date is in the future.
This can lead to an unexpected commercial or tax-related gain in Germany in particular, where the principle of caution permits the accumulation of high hidden reserves. In order to avoid any problems with liquidity that may result, the European Commission and German authorities have set down regulations that permit the balance sheet statement of gain to be moved to the settlement period. If there are similar requirements in your country, read the following carefully.
Fundamentals
The report for valuating foreign currency automatically posts the exchange rates determined to an adjustment account for a reconciliation account and to profit and loss accounts for valuation gains or losses. The following settings in Customizing for Contract A/R+A/P are required for foreign currency valuation:
- Define new valuation methods
To report and realize expenses as well as revenues according to article 43 of the German commercial code, you have to define a new valuation method for foreign currency. Choose the "Always valuate" indicator so that exchange rate gains are also stated (see IMG structure Contract A/R+A/P -> Closing Operations -> Foreign Currency Valuation -> Define Foreign Currency Valuation Methods).
- Define accounts for valuation earnings and losses in the system.
You also have to define an account for valuation earnings if valuation gains occur for the first time (see IMG structure Contract A/R+A/P -> Closing Operations -> Foreign Currency Valuation -> Define Accounts for OI Exchange Rate Differences).
Special Information for Reporting Evaluation Earnings
You can either order the valuation gains as relevant to the result in the profit and loss statement or as a "special item from currency changeover to the euro" in the balance sheet on the debit side after stockholders' equity. The section below describes the procedures for both kinds of reports.
Reporting Valuation Gains in the Profit and Loss Statement
The report for foreign currency valuation automatically posts valuation earnings and normally reverses them one day after the balance sheet key date. However, in this case, the valuation earnings may not be reversed since, due to the fixed exchange rate, profits and losses must be considered to be final. For the report run, mark the field Do not create a transfer posting.
In the years that follow, there can be no foreign currency valuation with posting because the fixed exchange rate makes the valuation final and irrevocable.
After the final valuation, you change the accounts defined in Customizing for realized valuation earnings and losses. Define accounts for rounding differences for company codes and currencies participating in EMU (see IMG structure Contract A/R+A/P -> Closing Operations -> Foreign Currency Valuation -> Define Accounts for OI Exchange Rate Differences).
If there is a payment for an item that was posted before the exchange rate was fixed, a realized exchange rate difference will be posted automatically to the rounding difference account defined in Customizing. The balance of the account for rounding differences cannot just be transfer posted for this purpose because the account also contains true rounding differences. For this reason, you use the report for foreign currency valuation (simulation run, field posting required should not be marked) to determine the balance the balance sheet adjustment account needs to state. You use the same valuation procedure for this report run as the procedure for the final valuation run executed the year before. Post an amount from the account for rounding differences to the balance sheet adjustment account for an amount that will give the balance sheet adjustment account the same balance as the one stated by the foreign currency valuation report. You have to do this for each participating company code per balance sheet adjustment account. Repeat this procedure prior to each balance sheet for as long as you receive payments for items posted with an exchange rate that was not fixed (i.e, prior to 1 January 1999).
Reporting Valuation Gains as Special Items in the Balance Sheet
The report for foreign currency valuation posts the valuation earnings automatically to the profit and loss account defined in Customizing. If you want to state the valuation earning as a special item, you have to transfer post the valuation gain manually from the profit and loss account to an account for special items (balance sheet account).
The foreign currency valuation report automatically undoes the valuation posting one day after the valuation run. You also have to undo your manual transfer posting on the same date (posting: account for special items to account for valuation gains).
After the valuation run and before further clearing postings are made, change the accounts defined in Customizing for realized valuation gains and losses. Define accounts for rounding differences for the company codes and currencies that participate in EMU (see IMG structure Contract A/R+A/P -> Closing Operations -> Foreign Currency Valuation -> Define Accounts for OI Exchange Rate Differences).
As long as there are items in the system that were posted prior to 1 January 1999 in the currency of one of the other participating currencies, you have to perform foreign currency valuation and transfer posting to an account for special items prior to each balance sheet key date as well as undo the transfer postings after the key date as described above.
If payment is made for an item, the exchange rate difference is determined and posted automatically. The posting is made to the account specified in Customizing for rounding differences. Prior to the next year-end closing, you have to transfer post the partial amount that resulted from exchange rate earnings and not rounding differences from the account for rounding differences to the account for exchange rate differences. You determine this transfer posting amount from the difference between the special item of the last year-end closing and the special item of the current year-end closing. The reduction of the special item matches exactly the realized exchange rate earning for the currencies participating in EMU.
Postings with Currencies Outside EMU
If you need to valuate open items with currencies outside the EMU or have a company code that belongs to a non-EMU country, take note of the following:
You may need to run the report for foreign currency valuation three times because you require different methods for valuation:
- one valuation run for all company codes and currencies participating in EMU with the "Valuate generally" method
- one valuation run for company codes participating in EMU with currencies not participating in EMU (such as the US dollar) with the valuation method conventional in your country (in Germany, this is the lowest-value principle)
- one valuation run for all other company codes and any currencies with the method usual in the country of the company code
Further Notes
Business Attributes
| ASAP Roadmap ID | 601 | Euro Conversion |
| Mandatory / Optional | 1 | Mandatory activity |
| Critical / Non-Critical | 1 | Critical |
| Country-Dependency | A | Valid for all countries |
Assigned Application Components
| Documentation Object Class | Documentation Object Name | Current line number | Application Component | Application Component Name |
|---|---|---|---|---|
| SIMG | _FICAEURO_BEWGEWINNE | 0 | I210007301 | Basic Functions |
Maintenance Objects
| Maintenance object type |
History
| Last changed by/on | SAP | 20000912 |
| SAP Release Created in |
