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Objective

This blog is aimed to provide an insight and overall understanding and consideration of currency setup in S/4HANA environment and have tried to answer the following queries.

  • What is currency type
  • In SAP S/4HANA how many kind of currency types exists
  • How to setup custom currency type
  • How  to set a currency key with the custom currency types
  • How to setup currency in Finance and linking Currency and Ledger
  • Options to setup currency in material Ledger
  • Options to setup currency in Transfer Pricing
  • Options to setup currency in Controlling Area
  • Options to setup currency in COPA
  • Options to setup currency in New Asset Accounting

What is currency type

In SAP configuration, currency plays an important role. In SAP, all currencies are maintained according to ISO Standard. We can configure currencies as per the rules of the country defined in the company code. SAP provides currencies of every country and we can also define our own currency if we require.

Currency Types in S/4HANA

We have following standard Currency types in SAP S/4HANA

Currency Type 00

Document currency is the currency that is applied for the document and company code currency is the currency where the document is generated. Example : An Indian company does a posting for a Sale of goods in USA. In this case the document currency would be USD and the Company code currency would be INR

Currency Type 10

Company code currency is defied at company code level in transaction OX02

11- Co Code Currency Group Valuation (used in Transfer Pricing)
12- Co Code Currency PC Valuation (used in Transfer Pricing)

(Currency Type 11 and 12 are explained in transfer pricing section)

You can select currency type 10 in controlling area only if all company codes assigned to the controlling area uses same currency.

Currency Type 20

If data is returned from Controlling to financial accounting in your application, for example via order settlement, you must use a currency type in the controlling area that is also used as the currency type of a parallel currency in the assigned company codes. Typically, these are the currency types for a group currency, hard currency or index-based currency.

–> Currency type 20 cannot be used in FI.

Currency type 20 is supported in FINSC_LEDGER, therefore only for compatibility reasons; if currency type 20 was already used in CO, then after migration of the currency configuration, “KSL” field of ACDOCA will be used for CO only, and FI will work with the fields HSL, OSL and VSL.

For new installations we strongly recommend to configure currency type 30 in CO and in FI (for the KSL (Group Currency) field in ACDOCA).

Currency Type 30

You define the currency key for these currency types when you define the client. You can define it by T-code: SCC4.

Currency type 20 is only known by cost accounting, whereas currency type 30 is known in financial accounting also. Therefore, data transmission via the modules CO, AM, and FI works seamlessly without any difficulties if currency type 30 is used by all.

Whether to use currency type 20 or 30 to know more detail you may read OSS note 119428

31- Group Currency Group Valuation (used in Transfer Pricing)
32- Group Currency PC Valuation (used in Transfer Pricing)

(Currency Type 31 and 32 are explained in transfer pricing section)

Currency Type 40 and 50

Hard Currency and Index Based Currency

You define the currency key for this currency type when defining the countries in the “Hard currency” field T-code: OY01

If you select currency type 40 or 50 in controlling area, the company codes must either be in the same country, or the countries must use the same index-based currency or hard currency.

Currency Type 60 – Global Company Currency

If you select currency type 60 in Controlling area, the company codes must belong to the same company, or the companies must use the same currency.

With currency types 40, 50, and 60, specify the currency only as long as no company codes have been assigned. If company codes have been assigned, the system defaults the currency automatically.

Currency Type 70 Object currency (CO)

Each object in Controlling, such as cost center or internal order, may use a separate currency specified in its master data. When you create an object in CO, the SAP system defaults the currency of the company code to which the object is assigned as the object currency. You can specify a different object currency only if the controlling area currency is the same as the company code currency. There is an object currency for the sender as well as one for the receiver.

Supported currencies in ERP

Still in S/4HANA till On-premise 1709 release we have maximum 3 currencies in FI(BSEG), 2 currencies in CO and 3 currencies in ML. However in Universal Journal table(ACDOCA) we can have maximum upto 10 currencies.

Currencies used in S/4HANA 1610 Onwards

From SAP S/4HANA 1610 On Premise version as well with SAP S/4 HANA Finance 1605 we can have upto 10 currencies in Universal Journal (ACDOCA)

Go to SPRO -> Financial Accounting->Financial Accounting Global Settings-> Ledgers-> Ledger -> Define Settings for Ledgers and Currency Types

In this Customizing activity, you configure the currency types and currency conversion settings that you use in Accounting and define the corresponding ledger settings and assign accounting principles for ledgers and company codes.

Currency Types

Check your currency settings and create additional currency types if required. Your own currency types must begin with the letter Y or Z, for example Y1, Y2, ZA etc.

For each currency type you decide whether you want the corresponding currency conversion settings to be valid globally for all company codes or want to define the currency conversion settings at company code-level.

You can’t make any changes to the SAP standard currency types Document Currency (00) and Company Code Currency (10). For the other standard currency types, you can define whether the corresponding currency conversion settings are valid globally or at company code-level.

If you are using transfer prices, create the required number of currency types (depending on the valuation methods you need) and select the valuation view you need (legal, group, or profit center valuation). For the currency types with group or profit center valuation, you need to enter the base currency type, meaning the currency type with the legal valuation view on which the transfer prices valuation will be based. For each base currency type there can be only one currency type using group valuation and one using profit center valuation.

Global Currency Conversion Settings

For your own currency types, enter the currency into which the conversion is to be made (Currency field), and the currency from which currency conversion is to be made (Source Currency field). In addition, enter the exchange rate type and the date on which the translation is to be carried out (document date, posting date, or translation date). You can also decide whether the currency conversion shall be done in real-time. If you don’t select the Real-time Conversion checkbox, you can do this at period-end closing using the foreign currency run.

Currency Conversion Settings for Company Codes

Company code settings for the ledger

ACDOCA V/s BSEG currency settings

First 2 Currency fields are derived from local currency i.e company code currency and controlling area currency and rest 8 fields are freely defied currency per ledger and all these fields you may see in Universal Journal table (ACDOCA)

There is no dependency on the currency types of the leading ledger.

Real-time currency conversion for all currency types is possible (or with foreign currency valuation program at period-end

Still BSEG is populated with 3 currencies so you may choose which 3 currencies you want to populate in BSEG (of course first currency will be default to company code currency for BSEG)

For further detail you may refer OSS note 2344012 (Currencies in Universal Journal)

Currencies used in Controlling

The system uses this currency for cost accounting. This currency is set up when you create the controlling area. It is based on the assignment control indicator and the currency type, following possible currencies can be assigned to controlling area, these are explained in currency type section above.

10        Company code currency
30        Group currency
40        Hard currency
50        Index-based currency
60        Global company currency

 

Controlling Area Currency

SPRO-> Controlling-> General Controlling-> Organization-> Maintain Controlling Area

Transaction Currency (CO)

Documents in Controlling are posted in the transaction currency. The transaction currency can differ from the controlling area currency and the object currency. The system automatically converts the values to the controlling area currency at the exchange rate specified.

The transaction currency is USD, the controlling area currency is EUR, and the object currency is SFR (Swiss francs). The system converts the amounts as follows:

  1. From transaction currency to controlling area currency (USD to EUR)
  2. From controlling area currency to object currency (EUR to SFR)

Material Ledger Currencies

SPRO->Controlling->Product Cost Controlling-> Actual Costing/Material Ledger-> Assign Currency Types and Define Material Ledger Types

Currency Type 10, 30

With Transfer Pricing active

For example we can have following currency types in Material Ledger

Currency Type 10, 31
Or
Currency Type 10, 32
Or
Currency Type 10, 31,32

Profit Center Currency with Transfer Pricing

Transaction 0KE5

It is common to set 30 in the controlling area, 10 and 32 in the currency and valuation profile, and 10 and 32 in the material ledger.

If you then set the profit center local currency type to 30 and valuation view 2 (profit center valuation) in Profit Center Accounting, the currency type 32 is continuously used. In Profit Center Accounting, 32 is updated as profit center local currency in the currency field KSL. The company code local currency in the profit center valuation (12) is then translated from the values 32 with the exchange rate type M with the current exchange rate (and updated in the field HSL). This means that in Profit Center Accounting, only the PCA valuation is available. The legal valuation (10, 30) is no longer available in PCA.

Similarly, if you then set the profit center local currency type to 30 and valuation view 1 (Group Valuation) is selected in profit center accounting then the currency type 31 is used. In Profit Center Accounting, 31 is updated as profit center local currency in the currency field KSL. The company code local currency in the profit center valuation (11) is then translated from the values 31 with the exchange rate type M with the current exchange rate (and updated in the field HSL). This means that in Profit Center Accounting, only the group valuation is available. The legal valuation (10, 30) is no longer available in PCA.

The flows of goods in legal valuation and in profit center valuation are valuated differently, even if the currency key is identical. For details. Please read the SAP note 1442153 .

If you need to change, add or delete any currency settings after the Material Ledger is productive, you would need to reverse the customizing changes, deactivate the Material Ledger, change the customizing to the desired values and restart the Material Ledger again. As a consequence, you will lose all the Material Ledger data in the system. Please, check the KBA 1511335 on this topic. Take into account that deactivation means running report SAPRCKMJX, and this report deletes all the Material Ledger data for the corresponding plant.

An alternative would be to use the SLO conversion services so that all Material Ledger data in the tables for currency type 20 are converted to currency type 30. Please, consider that this is a chargeable service.

Transfer Pricing Define Currency + Valuation Profile

You only need the currency and valuation profiles if you want to manage various valuations in parallel in your system

Group and profit center valuation must also be managed correspondingly in the material ledger as a currency type and valuation category as explained in material ledger section.

Typical currency settings with profit center valuation:-

FI: 10, 32
CO: 30
Currency and valuation profile: 10, 32
Material ledger: 10, 32
Profit Center Accounting: 30 and profit center valuation (= 32)
PCA 32 (KSL), 12 (HSL)
Currency type 12 is translated from 32 with Exchange rate type M at current rate

This means that in Profit Center Accounting, only the PCA valuation is available. The legal valuation (10, 30) is no longer available in PCA

Typical currency settings with Group valuation:-

FI: 10, 31
CO: 30
Currency and valuation profile: 10, 31
Material ledger: 10, 31
Profit Center Accounting: 30 and profit center valuation (= 31)
PCA 32 (KSL), 11 (HSL)
Currency type 12 is translated from 32 with Exchange rate type M at current rate

This means that in Profit Center Accounting, only Group valuation is available. The legal valuation (10, 30) is no longer available in PCA

Transfer Pricing Currency setup in Account  V/s Ledger approach

The following two functions are available: For your valuation views, you can either use separate ledgers or map multiple valuation views within a ledger.

If you decide on the scenario with separate ledgers, assign a valuation view to a ledger: The legal, group, or profit center valuation view. In this ledger, you can only configure currency types in the appropriate valuation view. The local and global currency are then always configured in the valuation view of the respective ledger.

If you want to use multiple valuation views within a ledger, do not assign a valuation view to the ledger. The local and global currency are then always used in the legal valuation view in this ledger.

Separate ledger approach is available from S/4HANA1610 onwards that means if customers are already using transfer pricing in their source system and doing a conversion to S/4HANA 1610 or higher version then the second approach i.e “Several valuation views within a ledger” would be possible solution.

For further detail you may use this link:-

https://help.sap.com/viewer/651d8af3ea974ad1a4d74449122c620e/1709%20000/en-US/f550d7531a4d424de10000000a174cb4.html

 

Restriction- ML can not be deactivated in S/4HANA

As of 1709 release , In the case the productive start was carried out and the material ledger postings exist in ACDOCA( = there are BSX line items), and customer wants to change any settings that might influence material ledger postings (change of the CURTPs in ML Type, any customizing change of GL that influence the set up of the table FMLT_CURTP_ML, just to name some of them) then there is no other solution but to introduce the new company code and start from the scratch the ML setup. This is recommendable for the test system.

For detail you may refer OSS note 2512618

Operating Concern Currency

This determines the currency and the valuation view in which the values in CO-PA are to be displayed or planned.

Actual data can be updated simultaneously in all the combinations of currency type and valuation that are described below, planning data is always updated in one currency only – the currency specified for that particular plan version.

If you deactivate the company code currency, you can no longer use plan versions and reports that use the company code currency.

New Asset Accounting Currency

For each currency defined in General Ledger Accounting, you have to create parallel depreciation areas in new Asset Accounting.

Fixed Asset Accounting currently only supports the FI relevant  (BSEG-) Currencies.
For additional currency types, which are not BSEG relevant, you do not need to create dep area; these currencies are converted during posting. This means, the sum of all depreciations does not balance with the activation value for the additional currencies.

For detail understanding on how to configure new asset accounting by aligning the depreciation area /accounting principal with currencies defined in Finance , please refer this blog on S/4 HANA- New Asset Accounting – Considering Key Aspects:-

https://blogs.sap.com/2017/03/25/s4-hana-new-asset-accounting-considering-key-aspects/

This blog is written based on my own experience and have referred various OSS notes, Your feedback is welcome.

Thanks

Brought to you by the S/4HANA RIG

Ajeet Agarwal
Product Expert (SAP S/4HANA Regional Implementation Group- APJ)

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15 Comments

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  1. Tkachenko Oleksey

    Hi Ajeet, this is Aleksey (worked together in RIG), I pleased to read your blog,

    and it’s great to see that you consolidated all info about currencies in one place!

     

    It might be useful to add note 2344012 as it contains a lot of helpful info…

    And looks like you made a typo:

    ’31- Group Currency Group Valuation (used in Transfer Pricing)’

    (1) 
    1. Ajeet Kumar Agarwal Post author

      Hi Aleksey

      Thanks a lot for your feedback , I have included suggested note 2344012.

      I could not make out the typo which you are referring as currency type 31 is for Group currency Group valuation and CT 32 is for Group currency PC valuation in TP (might be i am missing something)

      (1) 
    1. Ajeet Kumar Agarwal Post author

      Following CT are used w.r.t transfer pricing i.e

      11- Co Code Currency Group Valuation
      12- Co Code Currency PC Valuation
      31- Group Currency Group Valuation
      32- Group Currency PC Valuation

      When you define C+V profile you can pick either company code currency or Group Currency and combination of currency type and valuation view determines above mentioned 4 CT those are specifically meant for transfer pricing.

      So in this following example combination of CT 30 and valuation view 1 (Group Val) means CT 31

      (0) 
    1. Ajeet Kumar Agarwal Post author

      Hi Kishore

      Fixed Asset Accounting currently only supports the FI relevant  (BSEG) Currencies.
      For additional currency types, which are not BSEG relevant, you do not need to create dep area; these currencies are converted during posting.

      It is on roadmap for later releases, that Fixed Asset Accounting calculates the depreciation with the historic (activation) values in all currencies, but currently Fixed Asset Accounting does this only in the BSEG Currencies, However when this will be available can not be confirmed at this stage.

      CO, ML and TP also does not support custom currencies.

      (1) 
  2. Madhusekhar Gupta Gadamsetty

     

    Hi Ajeet,

    Nice blog on complex & sensitive area of currencies.

    One thing I would like to mention that in S/4HANA, we can also select 20 as the controlling area currency. I see in the above blog it is mentioned as 10, 30, 40, 50 and 60 (20 is missed).

    Madhu

     

     

    (0) 
    1. Ajeet Kumar Agarwal Post author

      Hi Madhu,

      Currency Type 20 is not supported as a “2nd or 3rd FI Currency”, which means, it cannot be used as a BSEG relevant currency. But it can be used in the universal journal with same functionality, like any other “non BSEG” currency, e.g. a currency type in customer namespace like Z1. Some processes, e.g. Fixed Asset Accounting depreciations, currently not fully support the non BSEG currency, this means the amounts are converted with the current exchange rate and not with the historic exchange rate of the asset acquisition.

      We recommend to use in OKKP a currency type, which can be used as BSEG relevant currency  (2nd or 3rd FI currency), because then you have 2 parallel currencies 10 and e.g. 30, which is precisely calculated by all Accounting processes.

      If there are reasons you can still use currency type 20 however this is not recommended due to the limitations as mentioned above.

      (1) 
  3. Monika Patel

     

    Thanks Ajeet for a great blog. Made it simpler to understand the concept and connections between various components.

    Well, We are in process of setting up this in system. completed config and checked the required settings via CKM9 (Plant/Valuation) & 8KEP (Controlling), 8KEQ. Also activated ML thru OMX2, OMX3, OMX1 & then CKMSTART.

    The validations worked correctly and we activated Curr profile and Valuation profile at Controlling Area level.

    First objective was to see – multiple currencies in Material Master. So far successful. We are able to view the price in Material master in MM in Legal Valuation, CoCd currency &  Group Currency, Group-Valuation.

    2nd objective was to run a simple transaction and check ACDOCA, ML tables and various currency and parallel valuation reports. However when we try to do MIGO initial Inv.upload system is throwing  DUMP error. On quick search it show that it is well known error –

    2510625 – Check consistency: Ledger check FMLT_CURTP_ML vs. FINSC_LEDGER

    2403356 – Check for Material Ledger Actual Costing Startup (after activation)

    2395913 – ML Actual Costing Live (ACT_LIVE) in table CKMLV

    While we are looking into it, wanted to check with you if , while your initial set-up did you face such errors ?

    Our understanding is that – it is due to mismatch between application maintained data. Realignment is required wrt Data-loads. Wanted to quickly check if you have a Check-list on the MUST-HAVE Config for the set-up described in the blog?

    Do we need to fully configure PCA before able to make any entry ? From Currency-matching perspective, In PCA we have set-up profit-center valuation in Group-currency

    As per your blog :

    FI: 10, 31  (where do I CHECK this ?)
    CO: 30 (Yes OK )
    Currency and valuation profile: 10, 31 (Yes OK)
    Material ledger: 10, 31 (Yes OK)
    Profit Center Accounting: 30 and profit center valuation (= 31) – OK
    PCA 31 (KSL), 11 (HSL)
    Currency type 12 is translated from 31 with Exchange rate type M at current rate

     

    This means that in Profit Center Accounting, only Group valuation is available. The legal valuation (10, 30) is no longer available in PCA.

     

    Further we would want to use TP in future, so we have done required activation, without actually configuring the TP pricing- Is it mandatory to complete the configuration before we can see the results , since we are trying simple Initial-upload (and TP scenario is not triggered right now)

    Many thanks for wonderful blog. In anticipation that solution to the doubts asked ( errors) will be answered too.

    Best Regards,

    Monika

     

     

    (0) 
    1. Ajeet Kumar Agarwal Post author

      Hi Monika

      Below is my answer to your query

      FI: 10, 31  (where do I CHECK this ?)

      Ans- You may check this in ledger specific currency settings
      Further we would want to use TP in future, so we have done required activation, without actually configuring the TP pricing- Is it mandatory to complete the configuration before we can see the results , since we are trying simple Initial-upload (and TP scenario is not triggered right now)

      Ans- I don’t think there should be any problem if you have setup C+V profile and activated this with required currencies and then in future you may use this process, however I did not tried this so I would suggest to test the behavior.

      Thanks

      • I II donr
      (1) 
      1. Monika Patel

        Thanks Ajeet. We have been able to complete the currency settings. also ML set-up works good.

        Now configuring TP.

         

        The scenario for TP –

        (a) TP with COPA – Account based  (TP for External Sales (Group Valuation), TP for Intenral Sales – Inter company STO )

        (b) TP for Intra company (profit center PCA)

         

        Regards, MP

        (0) 
  4. vikram kambham

    Thank you Ajeet for sharing your Knowledge.

    One question that I have is under section:  Typical currency settings with Group valuation:-

    Your outline:

    Profit Center Accounting: 30 and profit center valuation (= 31)
    PCA 32 (KSL), 11 (HSL)
    Currency type 12 is translated from 32 with Exchange rate type M at current rate

    Is this not how it should look like:

    Profit Center Accounting: 30 and Group valuation (= 31)
    PCA 31 (KSL), 11 (HSL)
    Currency type 11 is translated from 31 with Exchange rate type M at current rate

     

    (0) 
  5. Bhargav Jani

    Thank you Ajeet for such a nice explanation around currency settings.  I have couple of questions and appreciate if you can help answering them.

    1. You mentioned settings in 0KE5. Isn’t this related to EC-PCA? If you’re in S/4HANA then you would be using New G/L and PCA can be activated by assigning a scenario to the ledger.      Do we still need to perform 0KE5 settings and ticking Profit Center Acc. active in the controlling area? wouldn’t this use ledger 8A then with separate PCA document? I may be little confused as I have read contradicting things in books and blogs.
    2. Second question is related to C+V profile. So in case you have EA-FIN extension turned on and you’re using ML with Parallel COGM. You would then add 2 more line in the C+V profile you showed in the blog? 1 line with Currency type 30 for Parallel COGM 1 (valuation 5) and another line with Currency type 30 for Parallel COGM 2 (valuation 6)

    Appreciate your feedback.

    Br,

    Ram

     

    (0) 

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