Name: Advanced Valuation: Advanced Foreign Currency Valuation - SAP S/4HANA Cloud Finance
Uploaded: 2022-6-21
Duration: 539 s
Description: Understand how to support IFRS 9 requirement in SAP S/4HANA Cloud and how the system is connected with AP, AR, TR and GL accounting

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<div>Understand how to support IFRS 9 requirement in SAP S/4HANA Cloud and how the system is connected with AP, AR, TR and GL accounting</div>

Advanced Valuation: Advanced Foreign Currency Valuation - SAP S/4HANA Cloud Finance

Hello and welcome to this microlearning for SAP S/4HANA Finance. My name is Mirella Vorsprach, and I’m a senior product specialist for Finance. In this video, you will learn how to setup and run a period-end closing to demonstrate the benefits of the new generation advanced foreign currency valuation. First, I will introduce the status of advanced foreign currency valuation, then explain the posting invoice schema and calculation effects and then process overview covering business roles and configuration. Last but not least, will show you the demo in the system. Advanced Foreign Currency Valuation replaces the classical foreign currency valuation which is based on the ECC and S/4HANA OP and CE in form of job entry in schedule general journal app. Beside to it, it is also supported to be created as a task in Advanced Financial Closing. Key advantages of next generation advanced valuation, are many but mainly simplification of customizing and calculations, connectivity between journal entry and original journal entry, Last but not least, visibility of valuations per line item. In this part, the business case scenario will reflect the concept of the booking and revaluation in the system with consideration of direct quotation in exchange rate. And this is only for the demo purposes, at the time of booking invoice on 1st of Jan for getting a specific service for 1000$, the exchange rate was 1,4.  At a later point of time, the value of invoice should be re-valuated in the month-end close considering new exchange rate 1,6, and post whether it is a gain or loss. Hence in this case, it posts the unrealized loss for 200 Euro. Process overview reflects what business roles are involved by using which Apps and which spots of customizing are needed in order to run the advanced foreign currency valuation. Invoices usually are posted by the Accounting receivable, Accounting Payable or GL Accountant in the foreign currencies, where those invoices are going to be reevaluated based on month-end, quarter-end and year-end closings. Treasury Specialist is responsible for maintianing the exchange currency rates in other to reflect the monetary correctness of invoices according to the stock market. With the role of business process configuration, one is able to manage the configurations needed for running the functionality properly in the system. For this system demo, advanced valuation is automatically activated for the net new customers. But one should maintain the respective steps. This schema reflects the main areas of customizing for advanced foreign currency valuation in the system. The activation is made at the Accounting Principle level. Then, valuation and account assignment rules need to be defined and set up in such a way what should the advanced foreign currency valuation consider during running reevaluation. Last but not least, is to maintain specific accounts in the financial statement version with tagging the semantic tag “FX”. Last but not least, GL accountant is now able to run the advanced foreign currency valuation for month-end closing and post FX adjustment and whether it is a loss or a gain. Now I would like to show you the demo in the system At the first step, I would like to show you the posted invoice from supplier in US dollar for amount 1000. This, here we go to the Manage Supplier Line Items App, where you enter the name of the supplier and then get the list of open items posted documents. Here, we take this one and view it in the T-Account view. Here you see that in this posted in foreign currency for amount 1000 posted for this supplier on the credit side. This supplier is assigned to the reconciliation account Payables Foreign which is seen in the financial statement version. And then on the debit side for material purchased services that you get the invoice for. And if you would like to see in the company code currency which is euro, at that time the exchange rate was 1,4 so the value is 1400 euro. And since we run the month-end close in the end of the month, you would like to update the foreign currency according to the stock market which 1,6 and calculate whether it is a loss or gain. Therefore, here we go to the role of GL accountant, in order to run advanced foreign currency valuation, here we in the role of GL accountant, and would like to run advanced foreign currency valuation. Therefore, we go to the app of Schedule General Ledger Jobs. In this App, you will be able to create an execution run, at the first step you select the job template “Advanced Foreign Currency Valuation”, step two you can start immediately, step three you run for company code 1010 and 0L leading ledger, you have the option between key date or dynamic date. For the moment Key date should be fine enough. And then you select on the real run. At last, we click on the schedule. In order to see the results, we click on one step back and check the log results of this execution run. In order to see if FX posted document whether it is gain or loss. We choose log of result of foreign currency valuation – functional currency. And the scroll down a bit to see the FX posted document for original document 1900000123 with the exchange rate 1,6 in the end of the month, we see the generated FX unrealized Valuation loss for 200. At last, I would like to show you, how does it look like in the T-Account view. Here, one can see the results of revaluation with consideration of latest status of exchange rate for 1,6 updating the amount to 1600 which means adjust the value of euro to US dollar for German Company resulting of loss for 200 euro posted in the debit side. Key learnings of this video is to understand how to realize IFRS9 requirement in the SAP S/4HANA cloud system, how the system is connected with Accounting Receivable, Payable, Treasury, and General Ledger Accounting. This microlearning relates to the scope item J58 in the best practice explorer I will ask her that the third plane in the SAP blocked as well as further detailed explained in the SAP blogs of Finance for SAP S/4HANA Cloud 2202. Please check out the offering of openSAP courses at open.sap.com and search or filter for your MOOCs of interest as well as our SAP learning journeys on help.sap.com/learningjourneys. Thank you and goodbye.