Configuring Currency Translation

Objectives
After completing this lesson, you will be able to:

After completing this lesson, you will be able to:

  • Configure currency translation in models and stories

Currency Translation Overview

When to Use Currency Conversion

Currency conversion use case examples include:

  • Display corporate (group) and local operating currencies in stories.
  • Import and plan in local currency and immediately translate to group currency.
  • Translate with category-specific exchange rates.
  • Import both local and group currency actual values.
  • Analyze exchange rate changes with a constant currency.

Key Points for Currency Translation

  • Exchange rates are stored in the SAP Analytics Cloud currency translation table.
  • Currency tables can be updated using:
    • Flat files
    • BPC rate models
    • BW queries
    • Manual data entry
  • Exchange rates originate from financial institutions and are automatically or manually updated into SAC.
Note
  • The concepts in this lesson concern planning concepts not month-end closing currency translation.
  • If you use New Models, you can enable a currency variable in the model preferences to set a default target currency for conversions measures.

Key Terminology for Currency Conversion

  • Local Currency (LC) refers to the functional or operating currency of a company. For example, a company in the US uses the US dollar as its local currency but a company in Germany uses the euro.
  • Group Currency refers to the corporate level currency. For example, a company in the US that has a German parent will have the euro as its group currency.
  • Translation is used interchangeably with conversion.

Currency Translation Table

Translation Table

Currency conversion tables are defined independently of models. You can apply a selected table to any model you create.

Currency tables are listed on a separate Currency Conversion page, where you add, copy, and delete currency tables as required.

In the following example, the fields in a translation table explained:

  1. Source Currency: CAD values will be translated to EUR values at an exchange rate of 0.65 for accounts that have the Average rate type for postings that occur on 2024.01.01 or later.
  2. Category: Use this to assign exchange rates to specific categories such as actual or plan.
  3. Rate Version: Use this for optimistic or pessimistic scenarios for example. Use a category value = Specific to use rate version.
  4. Rate Type: These are assigned to accounts. Income statement accounts use Average and balance sheet accounts use Closing.
  5. Conversion Errors: Check the drop-down to view the conversion error log, if needed.

More Information

For more information on currency conversion tables, visit Learn about Currency Conversion Tables

View an Existing Currency Conversion Table

Business Scenario

The companies of ABC Corporation plan in local currency and then translate the results into ABC Corporation's group (corporate) currency. You have been asked to review the exchange rates that will be used to convert values for the current and prior year.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Access the Currency Conversion tab in the Modeler
  • Open a currency conversion table
  • Review the currency and exchange rates held in the currency conversion table

Model and Dimension Currency Settings

Model Preferences for Currency Conversion

In the Model Preferences:

  1. Activate currency conversion.
  2. Select the source currency table.
  3. Select the dimension for the date determination.
  4. Activate the currency variable (optional).
Note
When currency conversion is activated for the model, the Rate Type property is added to the account dimension, and the Rate Version property is added to the version dimension. The currency variable can be used to determine the target currency dynamically when the story is opened.

Currency Variable

If the currency variable is turned on, the variable can be used to determine the target currency for a translated measure (but not in a measure).

  • One of the main use cases involves SAP Analytics Cloud models designed for SAP ERP financial data. In this case the following measures would be used:
    • Local currency amount
    • Group currency amount
    • Others, if needed
    • Quantity
  • Measures can also be added to the model that calculate currency values on-the-fly.

The Entity Dimension Currency Settings

  1. Enable currency translation for a dimension (this can be any dimension that has a currency property, not just organizational dimensions).
  2. If needed, change the name of the currency property (for display in input forms). LC is the local (or operating currency) of the entities.
  3. For example, a store in Canada has a local currency of CAD.

Switch on Enable Currency to add a Currency column to the dimension. Using three-character currency codes, this column identifies the source currency for data that belongs to each leaf member.

The Currency column is enabled by default for the Organization dimension, and can also be added to generic dimensions (but not for any other dimension types).

For each converted measure in the model, a dimension (any dimension with currency enabled) is set as the currency dimension.

The Account Dimension Currency Settings

In the account dimension, the Rate Type property column appears when you switch on currency conversion in the model preferences.

With currency conversion switched on, you must set the Rate Type by accounts and update the Units & Currencies property:

  • EXP and INC use the Average rate type.
  • LEQ and AST use the Closing rate type.
  • The Units & Currencies property must be set to Currency.

The setting corresponds to the rate type for exchange rates in your currency table. It lets you distinguish between the average exchange rate for a period and the closing rate at the end of the period.

Note
Only the average and closing rate types are possible. Custom rate types aren't possible.

Enable Currency Conversion and Configure the Account Dimension

Business Scenario

You have viewed the currency table and exchange rates and now you are ready to enable currency conversion in your model and define the account dimension.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Access the Model Preferences to enable currency conversion
  • Update the Currency Conversion Settings for the model
  • Configure the Account Type, Rate Type, and Units & Currencies columns for the account dimension

Configure Model-Based Measures

Measures in models are used to store values in the database. In the Measures in a Model example, there are two measures:

  1. Local Amount - This stores the amounts in the currency of each company. The currency for each company (or entity) is stored in its dimension.
  2. Group Amount - This stores the amounts in the corporate currency. The group currency is fixed in the group amount definition.

Converted measures are calculated on-the-fly. The calculated values aren't stored in the database.

Model-based measures are available to story designers and therefore reduce the need to create story-based converted measures.

Note
Base measure rate type:  If you have an account dimension as the primary structure, the account member sets this value, so it’s not necessary for the measure. 

In order to confirm the conversion, you can preview the results for converted measures in models.

Configure Currency Measures in the Model

Task 1: Add a Group Currency Measure to a Model

Business Scenario

In your model, the entity dimension contains stores from Europe, Canada, and the United States. Their local values need to be interpreted in their own country currency based on the currency property in the entity dimension. You need to add a group currency measure to capture the group currency values.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Add a measure for group currency USD values in the model
  • Configure the group currency measure properties

Task 2: Add a Converted Currency Measure

Business Scenario

As there a so many Canadian companies, the model also requires a CAD Amount converted measure. The converted measure is calculated on-the-fly when the data is refreshed.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Add an alternative currency converted measure in the Calculations Workspace
  • Configure the converted measure properties

Configure a Data Action for Currency Conversion

For models with measures, you can use data actions to copy from local amount the group currency amount. The conversion rule can use measures or parameters as the source and target.

The date options include:

  • Booking Date: the date of the transaction data record.
  • Booking Date +1: the date following the date of the transaction data record.
  • Booking Date -1: the date preceding the date of the transaction data record.
  • Fixed Date: a hard-coded date.

The category can be set to Dynamic when the data action applies to various categories. Or, a specific category can be specified.

Configure a Data Action to Convert Currencies

Business Scenario

You are planning your income statement in local currency by country. When you are finished, you need a data action to quickly and easily convert the values into the group currency.

What skills will you develop in this practice exercise?

In this practice exercise, you will:

  • Create a data action
  • Configure the data action to convert currency

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