Currencies in Fixed Asset Accounting is a recurring topic of misunderstandings. To bring some light into that jungle SAP published a documentary overview in SAP Note 1065932. The intention of this Blog is to publish this information to a broader audience. Ideally it helps beyond its documentatory purpose to clarify existing functionality in case of problems.
Note that the following explanations usually apply to all postings to Fixed Assets. In individual cases, deeper integration may cause differences in postings from FI, or there are advanced options for intervening in the process.
1. Transaction currency
In Financial Accounting, you can enter a business transaction in any currency. In addition to the local currencies, the business transaction is also updated in this transaction currency.
In Asset Accounting, the system ignores the transaction currency.
From Asset Accounting transactions (for example, ABZON, ABUMN, ABAVN, …), it is not possible to use a transaction currency that differs from the local currency. Usually, the local currency and the transaction currency are used.
2. Local currency
With local currency SAP means the currency in which a company code is managed. In Fixed Asset Accounting, areas posting in realtime (technically: T093-BUHBKT = 1) are always managed in local currency.
3. Parallel currency / parallel local currency
Parallel currencies are also known as the second and third local currency.
In Financial Accounting, you can manage a company code in up to two additional local currency types (for example, group currency, index-based currency or hard currency). The currencies of the additional local currency types do not have to differ. For example, you could manage local currency, group currency and hard currency in the same currency unit (such as USD).
For each additional local currency in Asset Accounting, you have to manage a separate area in this parallel local currency for each area posting in realtime. This normally applies to the master area (area 01).
For parallel currencies, you can set the translation type. You can choose whether the system translates to the parallel currency from the underlying transaction currency or from the local currency. You can also set the exchange rate type to be used and the determination of the translation date.
4. Foreign currency
Asset Accounting defines foreign currency as a currency in which an area is managed, and, which fulfills the following conditions:
- The currency used does not match the (first) local currency and
- the area, which is managed in this currency, is not set as a parallel currency area (technically: T093A-CURTP is initial).
Foreign currency areas, in contrast to parallel currencies, are not usually translated from the transaction currency directly.
An exception displays transaction FB01 and its partner transactions, in which it is possible, thanks to deep integration with Asset Accounting, to supply the foreign currency areas with values during document entry. If the transaction currency is identical to the currency of a foreign currency area, the amount is transferred without later being translated using the local currency. You can also enter the foreign currency amount manually when you enter the document.
There is no option to make settings for translation from the transaction currency in the same way as for the parallel currency areas.
The system usually translates from the values in the reference area for value transfer.
5. Problem cases
In practice, using different currencies often results in problems with comprehension. This section describes phenomena common in Asset Accounting, and explains the system response using examples.
a) Rounding differences
You use a parallel currency area and a foreign currency amount in the same currency (for example, both are in EUR). The local currency is managed in USD. The parallel currency is set so that the value is translated directly from the transaction currency.
Example: You post a document (for example, an invoice receipt using transaction MIRO) in an alternative transaction currency (Example: 79.84 GBP).
The exchange rates are as follows:
- 100 GBP = 135 USD
- 100 USD = 80 EUR
- 100 GBP = 108 EUR
You receive the following result:
Local currency amount (= 01 in USD): 107.78 USD (= 79.84 * 1.35)
Parallel currency area (in EUR): 86.23 EUR (= 79.84 * 1.08)
Foreign currency area (in EUR): 86.22 EUR (= 107.78 * 0.80)
The differing result between the parallel currency area and the foreign currency area can be attributed to the differing currency translation type. The system translates the foreign currency area from the local currency value. Rounding differences may occur.
b) Rounding differences when transaction currency and foreign currency are the same
A special case in the previous example would be to make the posting with EUR as the transaction currency instead of GBP. The transaction currency would thus be the same as the parallel currency and the foreign currency.
In this constellation, you would expect the values for the areas with the same currency to be transferred identically from the transaction currency. However, this is the case for the parallel areas only, which are translated from the transaction currency. In all other cases, the translation is first to the local currency, then to the area currency. 100.00 USD in the transaction currency may therefore become 100.01 USD in the foreign currency area.
For this special case, SAP offers a modification, which ensures the value is transferred identically from the transaction currency for foreign currency areas, provided that these contain the same currency. If you are interested in obtaining this modification, contact SAP Support with reference to this note. SAP Development will then provide you with this modification.
c) Unexpected values in the foreign currency area
When you make a posting from Logistics, it may not be possible to explain the values in the transaction currency and local currency that result from a currency translation. An extreme case would be a posting with the transaction currency amount 0.00 but an alternative amount in the local currency. Example: Transaction currency 0.00 EUR and local currency amount 1000.00 USD.
The system responds as described before, even with constellations of this type. This may lead to differences between areas with the same currency but different currency translation types. For the numerical example above, the following scenario arises:
Local currency area (in USD): 1000.00 USD
Parallel currency area (in EUR): 0.00 EUR (from transaction currency)
Foreign currency area (in EUR): 800.00 EUR (from local currency)
The problem cases described above are not caused by program errors. In fact, with these results, the system has responded correctly in accordance with the system configuration. Note again that different areas in the same currency do not necessarily have to receive the same values.