cancel
Showing results for 
Search instead for 
Did you mean: 

Hard currency for local/statutory reporting

Former Member
0 Kudos

Hello experts.


I have a question : it is always said : "Typically the same as the currency of the country of the company code." for the company code currency.

In order to produce statutory reporting but is it possible to choose the CC Currency which is not the currency of the country and use the hard currency (third) to produce statutory reporting ? Is there an issue to convert exchange rates ?

To sum up, can we produce statutory reporting with the hard currency (with exchange rates conversion) and what is the difference between using "local" (used day to day) currency as Coco currency and using it as hard currency ?


Thanks a lot,


Abdel

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
0 Kudos

Hi Abdel,

Your first question ("can we produce statutory reporting with the hard currency") is not technical but legal or business-related. This normally depends on the country of operations and nobody can tell this to you here.

Hard currency is defined in SAP in the definition of country (see http://scn.sap.com/thread/1296592 ). Once you enter it and include it in a ledger (leading ledger, as a second or third local currency) of all company codes which operate in that country, then you will be able to report on it in all standard SAP reports (acct balances, line items, account statements etc.).

The main difference between company code currency (T001-WAERS) and Hard currency (T005-CURHA) is the order of conversion (see SM30, view V_T001A). Amount in company code currency is always calculated from the original transaction, while the amounts in 2nd or 3rd currency (e.g., hard) can either come from the transaction itself, or from the translated company-code currency amount. It can never go the opposite way. So, the key question is: Should the local currency be translated into the hard currency when preparing statutory reports? If yes, then the first one needs to be set in the company code. If they should be converted from the original transactions in parallel, then it does not matter much - although, as SAP suggests, it is the common practice to use country local currency in the company code and hard currency as a parallel one.

Hope it helps.

Former Member
0 Kudos

Thanks a lot Jan !

You are right, it depends on local requirement for statutory reporting.

I have some questions regarding your analysis :

1. When you talk about first local currency, is it company code currency (10) ?

2. Same question for second or third local currency ? Second is it hard currency (40) and third (50 ?) ?

3. If we take an exemple, with USD as company code currency and EUR as local currency, what you call the second currency I mean, what will be the consequences

I ask you because I have some difficulties to understand exactly "can either come from the transaction itself, or from the translated company-code currency amount."

Best regards,

Abdel

Former Member
0 Kudos

Hi Abdel,

Ad 1. When you talk about first local currency, is it company code currency (10) ?

=> Yes - the first currency of a leading ledger of a company code (config view V_T001A , currency type 10 ) is always the company codde currency in T001-WAERS. It is hardcoded and cannot be changed. You can only choose which one to use (in company code global settings).

Ad 2. Same question for second or third local currency ? Second is it hard currency (40) and third (50 ?) ?

=> You have several choices - see entry help to fields T001A-CURTP and CURTP2:

- 30 (Group currency) is defined on client level (T000-WAERS) and therefore is the same for all company codes defined in the SAP installation (client)

- 40 (Hard currency) and 50 (Index based currency) are based on country of the Company code (so they are the same for all Company codes defined in the same country)

- 60 (Global Company currency) is linked to "Company" or "Trading partner" (T880-CURR -> T001-RCOMP)

The choice will therefore depend on the usage. Group currency, as the name suggests, is used by the whole group - all companies in the same system. Hard (and index) currency is linked to a country (e.g., a hyperinflationary one) while the global Company currency offers the most flexibility and can be assigned to each Company code separately (if you create and assign a separate "Trading partner" to each, which is usually the case).

In your case, the 2nd currency you need is probably specific to a certain Company code or all Company codes in one country - therefore you should not choose 30 but rather 40 or 60, as you suggested yourself (by referring to "hard currency" in your post).

Ad 3.If we take an exemple, with USD as company code currency and EUR as local currency, what you call the second currency I mean, what will be the consequences

Just go to SM30, view V_T001A and check the "source currency" fields. You have two choices:

- either translate based on transactional currency (1), or

- based on first local currency (2).

In practice, if you choose "1" and you get an invoice in AUD, then it will be converted from AUD to USD (Company code currency) and in parallel from AUD to EUR (as the second currency). If you choose "2", then the invoice will first be converted from AUD to USD (Company code currency, as before) and then from USD to EUR (2nd currency). If you use different Exchange rates for the two steps, then these two cases get different results (in the second case, an invoice in EUR could even be posted with a different amount of EUR in the 2nd currency while in the first case it cannot happen). This can also have an impact on your choice, what to put as "Company code currency" and what as the parallel one - because if one should be calculated from the other (option 2), then the source one must be the Company code currency (type 10).

Also another consideration - if you have a Group currency (for all comp.codes) and you only need the Hard currency for some of them, then it is a good idea to put the Group currency as 2nd everywhere and the Hard one as 3rd where needed. This way, you will have all amounts in the same ledger & amount fields (KSLxx, OSLxx) of GLT0 / FAGLFLEXT in the same currency. But if you do not, then standard reports will handle it as well.

Hope it helps - maybe I wrote with too many words but hope it is clear. Let me know if you have further questions. Good luck!

Former Member
0 Kudos

Thanks a lot for this detailed answer, So if I understand well, this two step conversion (if you have an operation with a 3rd currency) will be difficult to manage because you can have a loss in change ?

Do you see other impacts : revaluation, reporting by using in Company code Currency (10) a currency which is not the currency of the currency of the country ?

Do you know if we can value stocks in the group currency instead of the company code currency because it is my issue. I don't want to use materiel ledger to value some stocks in USD.

Best regards,

Former Member
0 Kudos

Hi Abdel,

You are right - table MBEW does not show multiple currencies, only amounts in the Company code currency (type 10). So, without a material ledger, your stock will ve valued in this currency only (from which you can of course recalculate, but it will not be used in day-to-day movements such as goods receipts and issues.

Jan

Former Member
0 Kudos

Hello, very clear Jan.

Because our issue si the valuation of some stocks in another currency as the company code currency.

I have another question, because I think I don't understood very clearly your exemple with AUD.

Is there 2 ways to convert if we take the example above (with USD as company code currency and EUR as local currency).

The conversion will be done in 2 steps or is there 2 possibilities to do it :

1. AUD => EUR

2. AUD => USD, USD => EUR

Which not gives the same amount I guess.

Thanks a lot for your time.

Former Member
0 Kudos

Hi Abdel,

You described it correctly, these are the two ways to calculate the amounts in the parallel currencies.

The difference can occur if you use different exchange rate types for each of the conversions. If, for example,

- you have a local currency (10) as EUR and 2nd currency USD,

- M-rate is 1,25 (used from transaction currency to EUR) and another GRP rate is 1,30 (used from currency "10" to the 2nd one)

- you choose option 2 for conversion (i.e., transaction is first translated to EUR and then from EUR to USD)

... then an invoice for 100 USD will show up as 80 EUR in local currency "10" (= 100 / 1,25) and as 104 USD in your 2nd currency (= 80 * 1,30).

It looks wrong on the first glance, but many companies prefer it this way, because this translates the data from the local accounting without making exceptions for domestic vs foreign transactions. The only case where this would make trouble in consolidation would be intercompany trade (because receivables and payables in the two companies would not match).

Good luck!

Former Member
0 Kudos

So, if we are in the case '1' which

Derive value directly from transaction currency, be it for local currency or for group currency

o Value in transaction currency translate to value in local currency

o Value in transaction currency translate to value in group currency

We avoid all issues of conversions isn't it ?

Thank you

Answers (2)

Answers (2)

Former Member
0 Kudos

Parallel Valuation, MB5L | ABAP, SAP, benX AG,&nbsp...

I have indeed the same problem as this person. Without using Materiel ledger obviously...

praneelravilla
Explorer
0 Kudos

Hi

Generally Statutory Reporting will not allow Hard currency. But, if it is mandatory as part business requirement... then...

1. Need to maintain the currency settings at client level,

2. Create the co. code by assigning the other than co. code (other than the country specific) currency at - OX02,

3. We can over come this by activating the New GL - Parallel Ledger accounting.

4. Maintaining the exchange rate settings -OBBS & OBB8.

Former Member
0 Kudos

I have a question here :

Which is the continuation/following of this topic.