Converting One Currency to Another Using Currency Conversion

Currency Conversion is the process of transforming monetary amounts from one currency to another using predefined conversion rates that are valid for the specific date when the conversion is applied. This functionality is essential for businesses that operate in multiple countries or deal with international transactions.

• Conversion Rates: Uses established conversion rates that are valid for specific dates.
• Background Tables: Relies on background tables (for example, TCURR) that store currency conversion rates and categories.
• Dynamic Conversion: Can dynamically convert currencies based on data and the required timeframe for conversion.
• Practical Insight: Consider a scenario where your financial reports must consolidate revenue from multiple countries. You can use currency conversion to standardize all revenue figures into a single currency, ensuring consistency and accuracy in your financial analysis.

Ensure you have up-to-date conversion rates for the applicable dates.

Conversion rates reflect the market values or agreed-upon rates relevant to your reporting needs.

• TCURR Table: Stores primary currency conversion rates.
• TCURRX Table: Contains extended currency conversion rates and more categories.

Ensure that these tables are properly maintained and updated in the background. They contain various technical fields necessary for the conversion process.

When extracting data, ensure you include the currency conversion tables from your data source (for example, SAP HANA schema).

Example: If using the UM demo schema in SAP HANA, make sure all necessary tables for currency conversion are included.

Defining Conditions: You can specify conditions that determine when a conversion is to be executed. It allows for more precise and context-specific conversions.

Convert values only for a specific product or category.

Conversion condition: Convert only for Product1.

• Source Value Field: The original field containing the values to be converted.
• Target Value Field: The new field where the converted values are stored.
• Target Unit Field: The parameter specifying the target currency unit.
• Reference Date Field: The date field that indicates when the conversion should be based.
• Practical Insight: Suppose you want to convert the "Other Income" field values from Euro to USD only if the product category is "Product1". By defining these conditions and conversion parameters, you can achieve targeted and accurate currency conversions.

Here, we have an example of a conversion function in the Universal Model.

The Input data table requires all necessary fields such as Year, Other Income (the amount that is converted), Target Currency, ValueDate (which is related to the backend TCURR table), and Other Income USD which is the currency we would like to convert to.

In the following table, we see the results stored in the Other IncomeUSD column. Conversion was generated automatically based on the connections with the backend TCURR tables. The Other Income column stores the values (amount) before and the Other IncomeUSD column after the conversion happened.