USD Currency as Local Currency for Singapore Company Code in S/4HANA Cloud?

[Shakeel_Ahmed]

Objective

Singapore law permits corporates and legal entities to change their reporting and local currency to USD instead of SGD. It has been a popular exercise, which is in practice by several corporates as they keep USD as their primary reporting currency in Singapore.

When these corporates/ legal entities want to implement S/4HANA Public Cloud they expect to continue to follow their practice of keeping their primarily currency as USD in SAP also.

It is already predefined in the S/4HANA Cloud system and is the national currency of the company code.

Many consultants don't know what are the reports available in functional currency.

This is personal view. This blog has been written based on my personal view and understanding. SAP provides this function however couple of reports are a challenge to get from SAP and we will tackle those reports in this blog.

What Currencies Are Available in S/4HANA Cloud:

1. Local Currency: official/business currency of the country. E.g., Singapore = SGD, India = INR and Germany = EUR etc. It is always defined company code and country combination in the system.


2. Global Currency: currency which is a corporate (group of companies) currency, and one currency is valid for the entire system.


3. Additional currency or 3^rd Currency: As of now S/4HANA System allows just one additional currency type (currency) per company code in the system to keep. It is not like S/4HANA OP where we can, I guess, up to 8 currencies additionally. So, you would be able to choose one additional currency as per your requirement.

You can access this blog to understand how 3^rd currency is defined: How to Define Additional Currency in S/4HANA Cloud

4. Functional Currency: Functional currency is also available in S/4HANA Cloud, but it is not an additional currency type. Functional currency needs to be assigned to one of the existing currency types e.g., Functional Currency is assigned with Currency Type ‘10’ or ‘30’ or any custom currency type e.g., ‘Z0’. In case of Singapore it shall be custom currency type with USD currency.

You can access this blog to understand how functional currency is defined: How to Define Functional Currency in S/4HANA Cloud

Solution to this Issue

• Define Additional Currency with USD: You can define additional currency type with USD for Singapore company codes. You would be able to keep different currencies per company code as your additional currency or 3^rd currency. Please refer above mentioned blogs for this.


• Select Additional Currency Type as your Functional currency: You need to select this additional currency type as your functional currency in your Singapore company code(s). please refer the above mentioned blogs for this as well.

Functional currency is the solution to many business reporting requirements. however, SAP system does not generate all the reports in the functional currency and hence this solution has issues. We now understand this solution has some limitations, how can we overcome them?

There are multiple reports which have an option of additional/ 3^rd currency in the report but no option of functional currency. Since additional/ 3^rd currency is USD only, you can leverage these reports also to get the data/reporting in USD for Singapore company codes.

We need to understand, what are the reports that does not have functional currencies as selection or in output and what could be their workaround to minimize the risk of non-availability of the reports.

Reports Available in Function Currency or in Additional Currency Type in S/4HANA Cloud:

Bucket 1- Key Reports with Function Currency or 3^rd Currency Type

• Balance Sheet/Income Statement App


• Balance Sheet/Income Statement – Multidimensional App


• Trial Balance App


• Trial Balance Comparison App


• Year-to-Date Balances App


• Statement of Changes in General Ledger App (This will not have functional Currency; it has the Additional Currency/ 3^rd Currency Type as an option)


• Display Line Items in General Ledger App


• Display Line Item Entry


• Display G/L Account Balances – Singapore (Additional/ 3^rd Currency and Group Currency Available)


• Manage Customer Line Items App


• Manage Supplier Line Items


• Asset History App (Additional/ 3^rd Currency and Group Currency Available)


• Assets Balances (Additional/ 3^rd Currency and Group Currency Available)


• Assets Transactions (Additional/ 3^rd Currency and Group Currency Available)


• Assets Accounting Overview ((Additional/ 3^rd Currency and Group Currency Available)


• Depreciation List App (Free currency selection, means USD can be selected in the report)


• Manage Fixed Asset App (Valuation section would be available with Additional/ 3^rd Currency)


• Accounts Payable Overview (Free currency selection)


• Aging Report for Accounts Payable App (Free currency selection)


• Aging Analysis Accounts Payable App (Free currency selection)


• Supplier Payment Analysis App (Free currency selection)


• Days Payable Outstanding App (Free currency selection)


• Overdue Payables App (Free currency selection)


• Future Payables App (Free currency selection)


• Accounts Receivable Overview (Free currency selection, means USD can be selected in the report)
  
  
  
  • AR Aging Analysis
  
  
  • Days Sales Outstanding
  
  
  • Cash Collection Tracker
  
  
  • Exceeded Credit Limit
  
  
  • Top Ten Debtors
  
  
  
  


• Days Sales Outstanding App (Free currency selection)


• Overdue Receivables App (Free currency selection)


• Future Receivable App (Free currency selection


• Project Cost Report Plan/Actual App (Additional/ 3rd Currency and Group Currency Available)


• Please explore more such reports to increase this list. Help me increase this report list…put your report in the comment and I will add them.

Since: we are going to get the Function currency based on 3^rd Currency Type. 3^rd Currency Type currency and Function currency would be the same. Hence if any of them are available then it shall be okay to generate the reports.

A few examples:

Bucket 2- Key Reports with No Function Currency or 3^rd Currency Type

• Project Cost Actual App


• Service Actuals App


• Cost Centers Actuals App


• Cost Centers Plan/Actual App


• Profit Centers Actuals App


• Profit Centers Plan/Actual


• P&L Actuals


• P&L Actuals -Plan/Actual


• Cash Flow Statement Indirect Method app (this report is only in Company Code Currency)


• Display Supplier Balances App


• Display Customer Balances App


• Projects Actuals App


• Please explore more such reports to increase this list. Help me increase this report list…put your report in the comment and I will add them.

Your Issue Could be Lesser Based On Your Scenario you fall In

We have three currencies in S/4HANA Cloud in which we can extract almost all types reporting from the system. However, functional currency plays a major role here and you need to do evaluation what is your scenario.

Scenario 1: (a) Local currency as SGD (b) USD as Global Currency, (c) Additional currency (3^rd currency) as USD (d) Functional currency as USD (with 3^rd Currency Type)

Since you your global currency is also USD, both buckets of reports will be available in USD currency

Bucket 1- Key Reports with Function Currency Output or 3^rd Currency Type

+

Bucket 2- Key Reports with No Function Currency Output

Scenario 2: (a) Local currency as SGD (b) AUD (any currency other than USD) as Global Currency, (C) Additional currency (3^rd currency) as USD (d) Functional currency as USD (3^rd Currency Type)

Since you your Global company is other than USD, only bucket 1 of the reports will be available in USD currency

Bucket 1- Key Reports with Function Currency or 3^rd Currency Type

 

Note 1: These reports also come with Global Currency. If your Global Currency is USD, then these reports will also be useful for Singapore reporting requirement in USD.

Note 2: Most of the are built in USD based on the exchange rate that was/is maintained during the actual transaction posting or during the report generation.

 

As of now this is the situation with S/4HANA Cloud system for USD as local currency in Singapore.

Target audience: SAP Consultants, SAP Sales & SAP Pre-Sales, Partners, and of course Customers

 

Disclaimer: Topic is very sensitive, kindly test it thoroughly and verify when you are working for customer. Also look for final guide at Create Additional Currency Types | SAP Help Portal

---------------------------------End-----------------------------------

Relevant Blogs

Advanced Foreign Currency Valuation in S/4HANA Cloud (Cloud ERP)

Freely Defined Currency or Additional Currency + Functional Currency in S/4HANA Public Cloud

Balance Sheet Reclassification and Regrouping in S/4HANA Cloud

 

Learn > Share > Grow

 

Lets connect for more such learnings