Advanced Foreign Currency Valuation in SAP S/4HANA CLOUD
Advanced Foreign Currency valuation helps user for creation of financial statements. Advanced foreign currency valuation can be performed in functional currency by using different valuation rules. If functional currency is not defined, then it is performed in local currency of company code.
CBC users have to setup only realized, unrealized gain and loss account. There is no need to set up reconciliation account for balance sheet account. Posting is directly made in reconciliation accounts defined against semantic tag in FSV.
Once Advanced Foreign Currency Valuation is activated, the following apps cannot be used:
- Perform Foreign Currency Valuation (FAGL_FCV)
- Regroup Receivables / Payables (FAGLF101)
- Perform Further Valuations (F107)
If there are no postings in production environment, then Advanced Foreign Currency Valuation can be deactivated. Advanced foreign currency valuation also supports latest valuation like parallel accounting and integrated with the SAP S/4HANA Cloud for Advanced Financial Closing.
Advanced foreign currency valuation has following capabilities.
- Selection of the items relevant for valuation
- Determination of open items and balances
- Valuation of open items and balances
- Posting of valuation differences
CBC users must complete below configuration in configuration environment of your system to run Advanced Foreign Currency Valuation.
- Define Financial statement version
CBC users must create financial statement version from configuration environment via Define Financial Statement Versions.
- Assign Semantic tag to FSV
CBC users must assign relevant GL account to semantic tag “FX” to consider in Advanced Foreign Currency Valuation. GL account defined against semantic tag must be considered for Advanced foreign currency valuation.
- Define rules for Advanced Foreign Currency Valuation
CBC user must define a rule which will control advanced foreign currency valuation. CBC user must assign realized, unrealized gain and loss P&L account here.
- Assign Financial Statement Versions to Accounting Principle
In this configuration, CBC user must assign the financial statement versions to the accounting principle.
- Activate Advance foreign currency valuation
CBC users activate advanced valuation for an accounting principle. Advanced valuation can then be carried out for all company codes to which the accounting principle is assigned.
- Activate Additional Fields for Foreign Currency Translation
In this configuration, CBC users must assign additional account assignment fields which system will consider during valuation run like advanced foreign currency valuation and currency translation.
- Customer/Vendor/GL open items on Foreign Currency
All open items and balances in a foreign currency will be converted to local currency using the current exchange rate maintained in the system during Advanced foreign currency valuation. It will post to original G/L account defined in configuration environment under “FX” semantic tag.
i.e., We have posted a Vendor Invoice on 1000 EUR which is equivalent to 1100 USD based on exchange rate (EUR:USD – 1:1.10000).
- Schedule General Ledger Jobs app
User has to run schedule general ledger jobs app and needs to select template for advanced foreign currency valuation.
After the execution you can check the header, the results in different currencies, logs, and a document list of Advanced foreign currency valuation.
Step 1 : Template Selection
Go to Schedule General Ledger Job app and click on Create button. Select Advanced Foreign Currency Valuation template to schedule the job.
Step 2 : Scheduling Options
User can define recurring pattern, If user want to run this job just once or specific interval.
Step 3: Parameters
User can specify a company code, ledger, Valuation key date. User can also decide to run this on test run or update run.
Click on Check and Schedule button.
Advanced foreign exchange valuation Accounting document posted with delta exchange rate into reconciliation account and loss/gain currency valuation account.
- All Advanced Foreign currency valuation posted to original G/L Account.
- Advanced Foreign currency valuation is integrated with the SAP S/4HANA Cloud for Advanced Financial Closing.
- Support latest innovation i.e., Parallel Accounting
- Full traceability of advanced foreign currency valuation.
- Simple definition of valuation scope by use of semantic tags in the financial statement version.
Reference SAP Best practice : J58
You can also refer below links for more information.
Thanks for reading this blog post. I would like to see your comments and would like to answer questions which u can post at Q&A tag area : https://answers.sap.com/tags/66233466-fcd6-45d2-a9ae-2cba38c72e19