letter of credit

[Former Member]

Hi

Letter of credit as noted item,

we post f-57 for noted items

but it is showing as open itemin that vendor account how to reverse it

for ststisticalpostig f-55 reverse f-56 is there

i didnt fing reverse for noted item

And when the bank pays the amount we have to make entry in f-53 that all ?

there is process as clearing the noted item like downpayment clearing activity for his noted item?

[Former Member]

HI Ravi

Please when you use SPL GL Indicator "W" the account assigned to "W" must be a reconciliation account of vendors, which is a balance sheet.

Regards

Chandrasekaran

[Former Member]

HI

When you give LC to your suppliers, you need to transfer to Special GL Indicator "W" till you make the payment to your bank as per the due date

of the terms through T Code F-40 and when you make the payment to bank or when your bank debits your account make the payment through F-53 with special indicator "W", which will reverse your LC liability.

As far as I know LC is handled as workaround through Bills of Exchange.

In case if you make advance LC payment do the transaction through F-48 and repeat the F-53 to retire your LC liability.

I request you other forum members also to contribute and concur my approach.

regards

chandrasekaran

[Former Member]

thanks for the reply but LC is a off balance sheet item till the movement bank debits ur account how can i shown it in balance sheet

[Former Member]

HI rAVI

Please clearly indicate whether u r asking about LCs received from customer

or LCs given to Vendors.

regards

chandrasekaran

[Former Member]

Hi Chandrasekaran,

If u know about letter of credit, Can u explain LC related to customer and vendor

Rgds

sunfico

[Former Member]

letter of credit for vendors only