SAP FI Currencies |

Currencies4.6fi_26.1

Chapter 26 Currencies

• The system provides standard functionality for processing transactions in foreign currencies and valuating transactions and accounts managed in foreign currencies.

• Chapter Objectives

– Provide an understanding of the configuration issues connected with foreign currency functionality in the system.

– Provide an understanding of how transactions posted in foreign currencies can be translated into the local currency.

– Provide an understanding of how open items and account balances are automatically valuated using standard system programs.

Currencies4.6fi_26.2

=

=

Country Currency(Company Code) Local Currency

Foreign CurrencyAll Others

Foreign Currency

Currencies4.6fi_26.3

Sales Order

Invoice

Automatic TranslationAutomatic Translation LocalCurrency

Documents Posted in Foreign Currency

Currencies4.6fi_26.4

Prerequisites

Local Currency Defined in

Company Code

Local Currency Defined in

Company Code

Translation Ratio Between

Foreign and Local Currency

Defined

Translation Ratio Between

Foreign and Local Currency

Defined

Foreign Currency Code

Defined

Foreign Currency Code

Defined

Exchange Rate Defined

Exchange Rate Defined

I.I. II.II.

III.III. IV.IV.

Currencies4.6fi_26.5

TranslationTranslationRatioRatioTableTable

Exchange RateExchange RateTableTable

CurrencyCodes

Currencies and Exchange Rates

Currencies4.6fi_26.6

Exchange Rate Table

Translation Ratio

Quotation Type

Validity Period

Exchange Rate Type

Currencies4.6fi_26.7

Documents and Exchange Rate Quotations

Indirect Exchange Rate

Direct Exchange Rate

Currencies4.6fi_26.8

Translation Ratios

Currencies4.6fi_26.9

DEM EUR

divided by

FRF EUR

Base Currency

Desired RateDEM FRF

Base Currency & Inversion

Inversion

1 DEM EUR

Desired RateEUR DEM

Currencies4.6fi_26.10

Parallel Currencies

TransactionCurrency

LocalCurrency

ParallelCurrencies

Currencies4.6fi_26.11

• Group CurrencyGroup Currency

• Hard Currency Hard Currency

• Index CurrencyIndex Currency

• Global Company CurrencyGlobal Company Currency

• Group CurrencyGroup Currency

• Hard Currency Hard Currency

• Index CurrencyIndex Currency

• Global Company CurrencyGlobal Company Currency

Parallel CurrenciesPossible Additional Currencies

$

Currencies4.6fi_26.12

US Germany Mexico

Transaction CurrencyLocal CurrencyGroup CurrencyHard Currency

US Germany Mexico

Transaction CurrencyLocal CurrencyGroup CurrencyHard Currency

XXX

USD

USD

XXX

DEM

USD

XXX

MXP

USD

DEM

US GroupGroup Currency

USD

Parallel CurrenciesExample of Currency Types in a Multinational Corporation:

Currencies4.6fi_26.13

Posting inANY CURRENCY

is possible

The Local Currency A Foreign Currency

Posting ONLY in theFOREIGN CURRENCY

is possible

G/L Account MasterCurrency Key (Account Currency)

Currencies4.6fi_26.14

Germany France Austria Belgium Luxembourg Netherlands Ireland Finland Portugal Spain Italy

Countries Adopting the Euro

Currencies4.6fi_26.15

EURO Configuration

Translation RatioTable

Exchange RateType Table

Currencies4.6fi_26.16

EURO Configuration

Currencies4.6fi_26.17

Expiring Currencies

Currencies4.6fi_26.18

CurrenciesChapter Summary

• Key Terms:

– Local Currency– Foreign Currency– Translation– Exchange Rate– Exchange Rate Type– Base Currency– Currency Inversion– Transaction Currency– Parallel Currencies

Currencies4.6fi_26.19

CurrenciesChapter Summary

• Key Terms continued:

– Group Currency– Hard Currency– Index Currency– Global Company Currency