Objective
After completing this lesson, you will be able to identify the basic functionality of currency keys and exchange rate types
Currency Keys and Exchange Rate Types
Currency Keys Examples
Every currency used in SAP S/4HANA must have a currency key assigned. By default, most of the currencies in SAP S/4HANA are defined with standard international currency keys.
You can assign a validity date to each currency key defined in SAP S/4HANA.
You can define different exchange rate types for different purposes, such as valuation, conversion, translation, and planning. You can then maintain the exchange rate for a currency type and a combination of two currencies.
Translation Ratios
The relationship between currencies must be maintained per exchange rate type and currency pair using translation ratios. This activity usually has to be performed only once. Since inflation can deeply influence the relationships between currencies, translation ratios are maintained on a time period basis.
How to Display a Currency Key and Exchange Rate Types
How to Display a Currency Key and Exchange Rate Types
Exchange Rate Maintenance Tools
Maintaining Exchange Rates
The maintenance of exchange rates is an ongoing task.
You can use report RFTBFF00, which enables you to transfer external market data in file form, to automatically update the exchange rate table by uploading an input file in MultiCash form.
You can also use the reports RFTBDF07 and RFTBDF14 to transfer exchange rates. These reports can transfer the data in real time using a data feed interface if the external data feed supports real-time provision of exchange rates. Remote Function Call (RFC) enables a direct connection between an external system and SAP S/4HANA. For more information about the file input format, data providers, and file structures, refer to the documentation for this report.
Direct or Indirect Quotation of Exchange Rates
All SAP S/4HANA applications and functions process exchange rates using one of the following types of quotations:
- Direct: Uses one unit of foreign currency for the local currency.
- Indirect:Uses one unit of local currency for the foreign currency. It affects all the components in which exchange rates are used. It is neither application nor country-specific.
The type of quotation used is dependent on the market standard or the individual business transaction.
The following example demonstrates a direct quotation and an indirect quotation: Consider that the local currency is EUR and the foreign currency is USD.
- Direct quotation:
- USD 1 = EUR 0.8832. This means that one unit of the foreign currency USD costs the displayed number of units of the local currency.
- Indirect quotation:
- EUR 1 = USD 1.1319. This means that one unit of the local currency EUR costs the displayed number of units of the foreign currency, USD.
For each currency pair, you can define either the direct or the indirect quotation as the standard notation for the exchange rate. If the exchange rate you enter does not have the same quotation as the standard quotation set up in the application, the exchange rate is highlighted to show this.
Worklists for Maintaining Exchange Rates
Maintenance of Exchange Rates
In S/4HANA you find two Fiori apps for this activity. The newest one is the app Currency Exchange Rate. With this feature you can monitor, create, and change currency exchange rates.
Another way to do this, is to define worklists and then maintain the exchange rates using the transaction TCURMNT.
Design of Exchange Rate
Exchange rates can be entered as direct or indirect quotations. You can maintain two prefixes to differentiate between direct and indirect quotation exchange rates during input and display. The standard setting is valid if you do not enter a prefix.
These prefixes are as follows:
| Prefix | Use |
|---|
| " " (blank, without a prefix) | Used for direct quotation exchange rates |
| "/" | Used for indirect quotation exchange rates |
Scenarios Showing Direct Quotations and Indirect Quotations
Scenarios Showing Direct Quotations and Indirect Quotations
| Scenario | Setting/Quotation | Prefix |
|---|
| 1 | Standard setting, if direct quotation is mostly used. | You can enter direct quotation exchange rates without a prefix. |
| 2 | Both indirect quotation and direct quotations are used. | You can define an alternative prefix for both types of quotations. For example, use "*" for direct quotation and "/" for indirect quotation. If you follow this suggestion, the configuration does not allow exchange rates to be entered without a prefix and an error message occurs. Users are therefore forced to consider the correct quotation and enter the rate with a valid prefix. |
| 3 | Indirect quotation is the most widely used notation at your company. | You can configure different settings. The following types of settings can be defined: - "*" for direct quotation, " " (blank) for indirect quotation.
- This configuration allows indirect quotation exchange rates to be entered without a prefix, whereas the less used direct quotation exchange rates have to be entered with a prefix.
|
Refer to SAP Note 783877 for an overview of FAQs about currency translation.
How to Maintain Exchange Rates
How to Maintain Exchange Rates
Summary
- Currency keys are assigned to all currencies used in SAP S/4HANA.
- Exchange rate types are defined for valuation, conversion, and planning purposes.
- Translation ratios maintain currency relationships per exchange rate type.
- Exchange rates can be maintained automatically using external market data files.
