Translating Currency

Objectives

After completing this lesson, you will be able to:

  • Configure and translate currencies

Currency Translation Overview

SAP Analytics Cloud analytic models can easily handle most currency scenarios without a separate currency dimension. To accomplish this, you can either use the model settings or story currency conversion measures.

Note
In a measure-based model, you can enable a currency variable in the model Preferences to set a default target currency for conversions measures.

Exchange rates are stored in the SAP Analytics Cloud Currency Translation table. Exchange rates originate from financial institutions and are automatically or manually updated into the table. If a currency conversion is added and there are no exchange rates, the system will direct you to the currency table to add the missing rates.

With currency conversion, there are several terms to be aware of:

Local Currency (LC)
The functional or operating currency of a company; for example, a company in the US has a local currency of USD.
Group Currency
The corporate level currency; for example, a company in the US that has a German parent has a group currency of EUR.
Translation
Used interchangeably with conversion.
Note
The concepts in this lesson concern planning concepts only, not month-end closing currency translation.

Currency Translation Results in a Story

Currency results:

  1. The local currency property value for Store02 is EUR.
  2. The local currency is EUR. This value is stored in the database.
  3. Group Currency is USD. This value is stored in the database.
  4. Alternative Currency CAD is calculated but not stored. This is a model currency conversion measure.
  5. Simulated_CUR is a story calculated measure.
A table with stores in the rows and several columns of values in different currencies.
Note
Displaying the local currency property (1 in the figure) in the columns is optional and not required for the currency conversion to occur.

Currency 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 can add, copy, and delete currency tables as required.

Exchange rates in a table by date

In the preceding example, note the following:

  1. 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 2020.01.01 or later.
  2. Category is used to assign rates to a specific planning version such as Actual or Forecast. Leave this setting blank to create a generic conversion rate.
  3. Rate Version is used to create a rate for specific planning Versions and other scenarios. Set the Category to Specific and then type a name for the Rate Version.
  4. Rate Type allows you to define whether the exchange rate is an average for the month or whether it is the month-end closing rate. Income statement accounts use Average and balance sheet accounts use Closing.
  5. Check the conversion error log, if needed.

Currency tables can be updated via flat files, BPC rate models, and BW Queries. For more information, see the Currency Conversion Tables documentation.

Model and Dimension Currency Settings

Model Preferences: Currency

Enable currency conversion from the model Preferences using the following steps:

  1. Activate Currency Conversion using the toggle.
    • When currency conversion is activated for the model, the rate type and currency properties are added to the account dimension.
  2. Select the source currency table using the Currency Rates Table drop down.
  3. Select the date dimension for the date determination.
  4. Activate the currency variable (optional) by selecting Create Currency Variable in the currency variable settings.
    • The currency variable can be used to determine the target currency dynamically when the story is opened.
Currency settings in model preferences

Measures can also be added to the model that calculate currency values with each data refresh.

Dimension Settings: Currency

You can enable currency conversion for a dimension. When you do, the Currency property column, is added. Using three-character currency codes, this column identifies the source currency for data that belongs to each member. The Currency column is enabled by default for the Organization dimension type, and can also be added to generic dimensions.

To enable currency translation for a dimension:

  1. Use the Enable Currency toggle to enable currency translation for the dimension. This option can be for any dimension that has a currency property, not just Organization type dimensions.
  2. Change the name of the currency property (for display in the story) by selecting the pencil icon.
  3. LC is the local (or operating) currency of the entities; for example, a store in Canada has a local currency of CAD.
Organization dimension's currency settings

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

Account Dimension Settings: Currency

In the Account dimension type, the Rate Type property column is added when you enable currency conversion in the model Preferences. Set the Rate Type to Average for INC and EXP accounts, and to Closing for AST and LEQ accounts. This setting corresponds to the rate type for exchange rates in your currency table and allows you to distinguish between the average exchange rate over 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 are not possible.

In the example below:

  1. The EXP and INC account types use the Average rate type. LEQ and AST use the Closing rate type.
  2. The Units & Currencies property must be set to Currency.
Account dimension currency related property values. Account Type field is highlighted as 1 and Units & Currencies as 2.

Currency Conversion Examples

Forecast versus Actual Exchange Rates

If needed, you can compare values that use exchange rates for different categories. This feature is useful for what-if scenarios.

You can see in the example below that you can perform the following steps:

  1. Add Account and Forecast exchange rates.
  2. Add currency conversion in the input form for Actual.
  3. Add currency conversion in the input form for Forecast.
  4. View the results in the output.
Converted measure settings in a story for forecast vs actual exchange rates

Constant Currency Analysis

Constant currencies are exchange rates used by international companies to eliminate the effects of foreign currency fluctuations in financial statements. For example, you may want to see annual growth in a model currency (such as USD) but choose to use January's average exchange rate for all months of the year to minimize fluctuations in the monthly values.

Converted measure settings in a story for constant currency analysis.

In the preceding figure:

  • The Default Currency (USD) values are translated with the monthly average exchange rates for 2020. For example:
    • January: 11,655.9 x 1.1 = 12,821.5
    • February: 17,302.5 x 1.15 = 19,897.9
  • The USD in Constant ER (USD) values are translated with the January average exchange rate for 2020 only. For example:
    • January: 11,655.9 x 1.1 = 12,821.5
    • February: 17,302.5 x 1.1 = 19,032.7

Configure and Translate Currencies

Business Example

You need to convert currency values in your story. You have amounts in your model from different countries. For example, US company values are in USD, and Canadian company values are in CAD. These values by company/country are known as local currency values.

The corporate (group) currency values have also been imported into the model (imported directly from the source system). In addition, you want to create converted measures in the model so that you can save time when creating stories. There is also a story-specific need to compare current values at current exchange rates vs. prior year exchange rates to isolate variances due strictly to currency fluctuation.

In these practice exercises, you will:

  • View the currency table
  • Confirm the model settings for currency translation
  • Add a new converted measure in the model for CAD
  • Create a table in a new story and display local currency for each entity in the rows and include local, group, and CAD currency measures in the columns

Task 1: View the Currency Table

Task 2: Confirm the Model Settings for Currency Translation

Task 3: Add a Converted Currency Measure

Task 4: Work with Currencies in a New Story

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