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Spot Rate Countries- Exchange Rate configuration

Spot Rate: – Spot rate is nothing but the rates for a currency pair on a specific key date different to the day before.

The exchange rate is a way to calculate the differences between the local currency and transaction currency. Usually, exchange rate configuration is required, when the company is having business transactions in various currencies. There are different types of exchange rates between various types of currencies, like indirect quotations and direct quotations through bank selling rate, bank buying rate, and average rate. Exchange rates can calculate between two currencies other than local currency.

Local tax authorities only accept the central banks as the source of FX data for the financial reporting for the organizations operating in different countries. They struggle to find the alternative FX data source for specific countries that are defined as Spot rate countries. Where they interface the country’s central bank data to SAP to feed the daily rates and expect the FI document posted in foreign currency must consider daily rates instead of Monthly average rate.

While there is no silver bullet, there are best practices that should be followed. Below is the best practice solution to be followed if there is a spot rate requirement for the country by standard configuration.

Below, I illustrated the scenarios with screenshots on how the exchange rates will be considered if we post an FI Document with Foreign currency and Local currency for the spot rate countries.

The organization has a company in Hungary. As per the local tax authorities, they must use the Spot rates released by the Hungary Central bank for the foreign transactions.

Scenario 1: – Transaction posted in Foreign Currency (Other than Company Code Currency)

The requirement for the country is, any postings in foreign currency (Other than HUF) should consider the Daily Spot rate -S for the conversion of Transaction currency to Local Currency.

Company Code Transaction Currency Local Currency Group Currency Exchange Rate type
HUXX USD HUF USD S

 

Step 1: – Define New exchange rate type for Spot rate

For spot rate, we defined the spot rate type “S”.

Step 2: – In transaction code – OBBS-Assign Alternate exchange rate type-S for the exchange rate type M for the required currency pair you are expecting to consider the spot rate as below

Step 3: -In Transaction code- OBBS- Define the required currency pair with Spot rate as exchange rate and enter the exchange rate with Valid from the date as below

Step 4:- In Transaction code- OB08 Maintain the valid exchange rate for the rate type S.

Step 5: -Post an FI document in foreign currency (Other than HUF). The Document currency for the below scenario is USD. Where the conversion of USD to HUF conversion was done by using the rate type -S.

Step 6: – You can verify the document posted with exchange rate value in the BKPF table where we can find the exchange rate maintained for S -rate type was considered while posting the transaction instead of M.

Scenario 2: – Transaction posted in Company Code Currency

The requirement for the country is, any postings in local currency (HUF) should consider the Monthly Average rate type -M for the conversion of Local currency to Group Currency.

Company Code Transaction Currency Local Currency Group Currency Exchange Rate type
HUXX HUF HUF USD M

 

Step 1: – In transaction code -OBBS- Maintain Currency Translation Ratios

Enter the exchange rate type -M with From and To currencies with Valid from date. And Ratio from and to as below.

Step 2: – In transaction code- OB08- Maintain the Exchange rate

Enter the exchange rate with Valid from the date as below

Step 3:- Post an FI document with FB01 in Local Currency ( HUF)

Step 4:- You can verify the document posted with exchange rate value in BKPF table where system considered M rate type for the conversion of HUF to USD

I hope this blog gives a fair idea on how to define spot rate type and configure spot rates for specific countries that require daily spot rate or monthly rate based on the type of transaction currency.

Thanks,

Leela Amaraneni

2 Comments
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  • Hello Leela,

     

    Thanks for this Blog!

    I have a question. What has to be done if scenario 1 has to be used for a spot rate country, but at the same time scenario 2 is required for other company codes on the same SAP client? The settings above are not company code specfic.

    E.g.:

    Company A in Ukraine: Spot rate has to be used for company code currency.

    Company code B in Germany. No spot rate applicable. Foreign currencies will be translated using the monthly rate (M resp. EURX).

    Thank you!

    Joachim