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In Financial accounting apart from the loacal currency we can define two additional currencies for the company code. The main purpose of using parallel currencies is to maintain the G/L accounts in different currencies. The companies which have subsidiaries in different countries use parallel currencies to update the foreign business transactions in different foreign currencies (parallel currencies).

We can use various currency types for the parallel currencies such as Group currency, Global Company currency, Index based currency and Hard currency.

The purpose of using parallel currencies in Asset accounting is to maintain the fixed asset values such as APC and Depreciation in different currencies.

1. Define Currencies for leading ledger: (OB22)

SPRO–>Financial Accounting (NEW)–>Financial Accounting Global settings–> Ledgers–> Ledger–>Define currencies for Leading ledger

  Here you define the additional currencies that you want to use

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2. Define Depreciation Areas:

SPRO–>Financial Accounting (NEW)–>Asset accounting–>Valuation–>Depreciation Areas–>Define Depreciation Areas

Depreciation areas 1, 2 and 3 i.e. Book Depreciation, Special tax Depreciation and Derived Depreciation are already defined in the system. Just select 0, Area do not post for Depreciation area 2

3. Define Depreciation Areas for Parallel Currencies:

We should always copy the depreciation areas from the real depreciation area when creating depreciation areas for the parallel currencies. Since, we are using two parallel currencies i.e EUR and USD. We should define two depreciation areas for parallel currencies for each of the depreciation areas. i.e we should define 1 depreciation area for USD and 1 depreciation area for EUR  for both Book Depreciation area and Special tax depreciation area. Therefore we will have 4 depreciation areas for parallel currencies 2 for Book depreciation and 2 for Special tax depreciation.

Depreciation areas for parallel currency USD for Book Depreciation

In the same way create one more depreciation area for parallel currency EUR for Book Depreciation

Depreciation areas for parallel currency USD for Special Tax Depreciation

In the same way create one more depreciation area for parallel currency EUR for Special Tax depreciation

4. Specify Area Type: (OADC)

Here you specify the purpose of the depreciation area i.e. for what type of valuation you want to use the depreciation area.

5. Specify Transfer of APC values: (OABC)

Here we specify how the APC values will be transferred to the depreciation areas. For example if you want to show the APC values of a depreciation in foreign currency then you should use the the local currency values as basis, that means for depreciation areas in foreign currency you should use book depreciation as the base. We should also mark the depreciation areas in foreign currency as identical so that the values from the transferring depreciaiton area  are transferred without any changes.

6. Specify Transfer of Depreciation Terms: (OABD)

Here we specify the transfer rules for the transfer of deprecation terms to the depreciation areas.

7. Define Depreciation Areas for Foreign Currency: (OAYH)

  SPRO–>Financial Accounting (NEW)–>Asset accounting–>Currencies–>Define Depreciation areas for Foreign Currencies

Here we assign foreign currencies for depreciation areas in which we want to them to be valuated.

8. Determine Depreciation Areas in the Asset Class: (OAYZ)

9. Create an Asset: (AS01)

10. Post Asset Transaction: (F-90)

Post a Transaction for the asset.

11. Asset Explorer: (AW01N)

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42 Comments

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  1. Nathan Genez

    Why did you include steps for the configuration of the depreciation key?  That’s not directly related to the setup of parallel currencies in FI-AA. 

    Also, I’d recommend an introduction to the topic.  Explain why this setup is required and what the benefit is.

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  2. sasmito handoko

    Dear Sneha..

    Could you advice me on my problem below ?

    We are using 3 depreciation area which is :

         – 01 Book Depreciation IDR,

         – 02 Tax Depreciation IDR 

         – 99 Book Depreciation USD

    while IDR is our company code currency.. (local currency)

    we’ve set the asset to be capitalized from PO when we perform Invoice Receipt (MIRO)

    and also set the asset value date to Invoice Posting Date

    the question is :

    if we bought an asset for example 100.000 USD..

    then we perform GR and IR… with rate of 9000 IDR / 1 USD

    we get the capitalized value in depreciation area 01 –> 100.000 USD * 9000 = 900.000.000 IDR

    but in depreciation area 99 we got value of (assuming todays rate is 8900 IDR / 1 USD) 900.000.000 IDR / 8900 = 101.123,59 USD

    differs from real value of 100.000 USD

    how to get the initial value of purchase 100.000 USD to enter in deprec. area 99 ?

    what should i do ? any idea ?

    thank you…

    Sasmito

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    1. Sneha Jain Post author

      Hi Sasmito,

      Please check the config in OABC (Specify transfer of APC values). You should use 01 depreciation area in valuead field and select identical check box for depreciation area 99.

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  3. Roberto Scerbo

    hello, good presentation,

    I would like to know about this paragraph,

    Could you explain the reason of this activity? how could I distinguish a real depreciation area? is it mandatory?

    “We should always copy the depreciation areas from the real depreciation area when creating depreciation areas for the parallel currencies. Since, we are using two parallel currencies i.e EUR and USD. We should define two depreciation areas for parallel currencies for each of the depreciation areas. i.e we should define 1 depreciation area for USD and 1 depreciation area for EUR  for both Book Depreciation area and Special tax depreciation area. Therefore we will have 4 depreciation areas for parallel currencies 2 for Book depreciation and 2 for Special tax depreciation.”

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    1. Sneha Jain Post author

      Hi Roberto,

      Thank you. Regarding your questions, it is mandatory to copy the depreciation areas for parallel currencies from the real depreciation area because inconsistencies will arise in transfer of APC values and depreciation terms if you dont copy from real depreciation area.

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  4. Lakshmi Sama

    Hi Sneha,

    Nice effort and really an appreciatable doc. Thanks for sharing such a wonderful doc.Keep sharing your knowledge.

    Regards,

    Lakshmi S

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  5. Nikita Kapoor

    Very nice thank you. Just one point –

    6. Specify Transfer of Depreciation Terms: (OABD)

    Here we specify the transfer rules for the transfer of deprecation terms to the depreciation areas.

    I believe here value 01 in row 2 and column 3 above is ineffective and therefore better left blank as it does not adopt dep terms and gives a warning message to that effect in asset master creation in last tab unnecessarily.

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  6. Nikita Kapoor

    Some screenshots of posting I am unable to see even after magnifying as they are becoming blurred. Kindly if possible Post large images for postings. Thank you again for such helpful article.

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  7. Ashik Chollangi

    Awesome, bloddy Awesome.. thank you very much!! I was struggling here and seriously Thanks to SCN and Sneha Jain

    ** I couldn’t see some of the pics in AW01N.. I dont see any prb wth my internet!!

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  8. Cecil D'Souza

    Thank you for this informative document. It would be nice to show tcodes along with some spacing between the screen shots and the various item points that have been numbered. That way, nothing is crammed up and can be better read and understood.

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      1. Cecil D'Souza

        Thank you Nathan. I always wondered why everybody was doing the same thing. But I have seen some of your documents and one I recently read about ‘Asset counting – how are asset master record tabs and fields’ where the format, spacing, font and screen shots were far superior to this one. Nevertheless, this is a great forum and I look forward to studying Asset accounting from your articles and blog. Perhaps, you are the expert.

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        1. Nathan Genez

          Well, the editors are bad but not completely worthless.  I see a lot of bad formatting as well but I think that’s when the author is pasting the material in from MS Word.

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