Question Re: Foreign Currency Valuation : Delta Posting Logic in Enterprise Resource Planning Q&A

Foreign Currency Valuation : Delta Posting Logic

Former Member — Fri, 11 Feb 2011 10:42:54 GMT

Hi,

I would like to know, What is Delta Posting Logic in Foreign Currency Valuation?

I appriciate your help.

Thank you,

Atul

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Fri, 11 Feb 2011 11:09:04 GMT

Hi Atul,

In Foreign Currency Valuation, you have the option to post the valuation as per the posting date and reverse it on the beginning of the next month.

Alternatively, you can also choose not to reverse the postings made, and SAP permits posting using delta logic(with line item update) where you valuate but do not reverse such valuation the next day. This simply means that with this posting, this becomes a basis for revaluation the next month.. assuming nothing was posted the next month.

For Example:-

W/o Delta Logic

on 1st january'2011 you posted an Invoice of 100 DKK @ 8 = 800 INR

On 31st january'2011 DKK rate was down to 7, So revaluation entry posted as a gain of 100 INR and this entry WAS reversed on 1st february'2011.

Now assuming no entry was passed in the month of February and this Invoice still remains Open, and the rate as on 28th february'2011 is 9 INR to 1DKK, then a revaluation loss would get posted for 100 INR(Note the rate difference was taken from the original posting and the revaluation as on 31st january'11 was completely ignored.

With DELTA LOGIC:-

on 1st january'2011 you posted an Invoice of 100 DKK @ 8 = 800 INR

On 31st january'2011 DKK rate was down to 7, So revaluation entry posted as a gain of 100 INR and this entry "WAS NOT"reversed on 1st february'2011.

Now assuming no entry was passed in the month of February and this Invoice still remains Open, and the rate as on 28th February'2011 is 9 INR to 1DKK, then a revaluation loss would get posted for INR 200 instead ( Note the difference was not taken from the original posted Invoice but the total value in that Account).

if the entries are not being reversed as in DELTA logic, then the revaluation needs to be posted to the same Account.

Hope it is clear.. You can test it with this scenario.

Regards,

SAPFICO

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Sat, 12 Feb 2011 08:10:28 GMT

Hi,

I have got my concept clear now.

Thank you,

Regards,

Atul

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Wed, 25 Sep 2013 05:37:33 GMT

Hi!

Absolutely Kavita, but why is that we reverse it, I must elaborate my question, why is reversing required? How can it affect all other things?

Regards,

Siddharth

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Wed, 25 Sep 2013 05:59:04 GMT

Hi Siddharth,

Reversing and not reversing are different ways of accounting but the net impact is still the same in books..

REVERSAL :-

We first revaluate as on the end of the month to represent a true and fair picture of our assets and liabilities in the books and then we reverse it on the first day of the next month.. meaning the value in the books is same as original posting and the receipts and collections will be revaluated as compared to original postings, if any collection or payment has happened during the month.. if not then again at the end of the month, revaluation will be done w.r.t. the currency value of the original posting

NO REVERSAL:

Here we chnage the values of assets and liabilities for good in the books every month end and do not reverse in the beginning of the next month, and the month end revaluation is done w.r.t rates as per last revaluation.

They are only different approaches of accounting...but the important point to note is the net impact is SAME.

Hope this helps you..

BR,

Kavita

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Wed, 25 Sep 2013 06:33:39 GMT

Hi Kavita,

Thank you for your precious reply, I got the concept clear now.

Regards,

Siddharth

Re: Foreign Currency Valuation : Delta Posting Logic

Former Member — Fri, 17 Jul 2015 15:18:01 GMT

Hello Mam,

In the book their are 5 steps mentioned out of which I understood the first three steps i.e.

1. When a vendor invoice is cleared in the new G/L the exch. rate diff that is actually relized is not immediately entered because the clearing doc is entered in all ledgers in the new g/l and the exch. rate diff to be realized may be diff in diff ledgers.

2. To clear the doc with foreign currency in the new G/L, the diff amount between the original incouce date and clearing dare is always displayed or posted as the realized exc. rate diff. The correct realized exch. rate diff is then determined for each valuation area during the next foreign currency val run. The diff is determined by using the diff amount recorded in the FAGL_BSBW_HISTRY table and the actual exch rate on the clearing date.

3. Once calculated, the exch rate diff is posted against the realized exch rate that is already entered.

4. This second posting has the date of the val run usually the end of the month, as the posting date.

5. You can set the indicator for using the clearing date as the reversal date to ensure that the posting date of the correction val run is the clearing date of the valuated items

could you please explain me the 4 and 5 steps

thanks