Sap Accounting: Re: [sap-acct] Balance in local currency only

Re: [sap-acct] Balance in local currency only - FS00

Posted by Ron Roberts (Managing Consultant)
on Aug 10 at 2:33 PM

The setting has the following impact:

Any posting done in a currency other than local currency will calculate the
localcurrency amount generally using excahnge rate "M". Once the local
currency amount is calculated and used in the posting, SAP completely
ignores the transaction currency amount for future activity. SAP "locks in"
on the local currency value and forgets that there was any other transaction
currency involved in that line item. So, as exchange rates change, there
will be no impact on to the local currency value in that G/L account. Any
execution of the currency revaluation transaction will have NO EFFECT on the
local currency value of the G/L account.

That said, there is NO local currency gain or loss in the example you
present. the difference between the $600 goods receipt and the $650
invoice would be considered purchase price variance...just like the entire
transaction took place in local currency.

Ron

---------------Original Message---------------
From: Sandip Chopra
Sent: Tuesday, August 02, 2011 4:17 AM
Subject: Balance in local currency only - FS00

Hello Expert,

I am trying to understand the example from SAP help for 'Only Manage Balances in Local Currency' indicator in FS00.

Referring to the below example, my question is what will happen if the indicator is selected. Would it eliminate the exchange rate difference of USD 50?

If yes, what is the process that is followed by SAP, which will eliminate exchange rate difference because ideally the exchange rate difference (gain or loss) should be accounted for. Please help!

"You set up a clearing account for goods receipts and invoice receipts and manually post these items to it. You post invoice receipts in the invoice currency and goods receipts always in the local currency.

Invoice receipt 1000 DEM 600 USD
Goods receipt 600 USD
Both items can be cleared if the clearing account balances are recorded in local currency only. If you have not set the indicator for this account, the system will translate DEM to USD during the clearing procedure in order to determine the amount in USD required to clear 1000 DEM. If the translation rate is .65 USD per DEM, then the system displays 650 USD for the invoice receipt and 600 USD for the goods receipt when the open items are processed.

This means that to clear both of these items, you will also have to enter a difference posting for 50 USD, and the system will automatically make an additional exchange rate difference posting for this amount."

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