Introduction
When a transaction is made in a foreign currency on a supplier account, it is converted to the company code currency using the exchange rate on the posting date.
Since this exchange rate may differ at the end of the period, the open items must be re-evaluated based on specific business and legal standards.
Business Scenario: Foreign Currency Valuation
Jake will support the foreign currency valuation in accounts payable in the subsequent period-end closing.
To prepare for this new task, he first familiarizes himself with the basic terms:
- Valuation Method
- Valuation Area
- Posting Logic
Select the play button to learn how to perform foreign currency valuation in SAP. Understand the valuation method, valuation area, and the generation of valuation postings. Watch now!
Jake's Summary
To perform a foreign currency valuation, a valuation method must be configured in the SAP system. This determines the
- Valuation Procedure
- Exchange Rate Type
- Document Type
The method is assigned to a valuation area. When scheduling a valuation job, assign a valuation area and key date.
The foreign currency valuation run generates the valuation posting on the key date, the valuation expense/revenue from the currency valuation, and the offsetting entry on an adjustment account. The posting cannot go directly to the payables reconciliation account, so it goes to an adjustment account. The valuation area also controls ledger determination.
The posting is reversed the next day, but this can be changed in the job parameters.
Foreign Currency Valuation Demo
Jake's manager, Sandra, asked him to test foreign currency valuation using a testing environment. He double-checks his balance sheet, accesses the General Ledger Account, and accesses a USD 10,000 invoice.
Select the play button to learn how to perform foreign currency valuation in SAP using the Fiori App Schedule General Ledger Jobs. This video provides step-by-step instructions on accessing the valuation template, scheduling the job, and reviewing the results.