Use different exchange rates between B/S and P&L

[Anas]

Dear Community, 

Currently, our client is using the average rate (type M) for currency translation. 

As a target, they would like to make the consolidation directly in SAP, and therefore use two different exchange rates: 

- One for Balance Sheet accounts (closing rate)

- One for P&L accounts (year to date average rate)

Is it possible in S4HC to use two different exchange rate type depending on the g/l account?

I've found several blogs about on-premise solutions but not S4HC.

Thank you,

Best regards

Anaïs

[HenrikeGrtecke]

Thank you for your question. It has been forwarded to the experts. Kind regards, Henrike

[FlorianRoll · Accepted solution]

Hi,

With regards to currency translation to a group presentation currency in accounting, we recommend the following:

• Accounting
  • have an alternative measure in accounting capturing the group presentation currency (e.g. global currency)
  • Currency translation in accounting happens while posting. 
  • The closing rate cannot be available at that point in time
  • The translation in accounting allows you to have an accurate translation at the spot rate of the transaction for P&L and BS movements, which is the closest possible to get to accounting standards like IFRS. It also allows you to get a preliminary view on your group currency amounts at any time reflecting the latest accounting journals
• Group Reporting
  • Do closing rate translation at closing rate in Group Reporting as part of your closing activities
  • integrate the original accounting group currency together with the local (functional) currency (e.g. release task)
  • run currency translation task task in GR
  • Result is that you have 2 group currency amounts. The original one translated at the spot rate of the transaction which is in line with the one in accounting, and the closing rate (e.g. for BS only).
  • A difference is calculated and stored on a separate translation key as well as on a dedicated subitem (transaction type) or in the case of equity on a separate FS item (currency translation reserve).

Hope this helps.

Kind regards,

Florian

[OwenLiu · Accepted solution]

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