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Appendix

Contents:
Additional Slides for Detailed Display of:
Currency and Valuation Examples
Calculation of Exchange Rate Differences
Details for Determination of the Costing Sequence
(Multilevel Actual Costing)

SAP AG 1999

SAP AG

AC530

9-1

0.2
Example of a Single Currency
Enterprise with Headquarters in the USA
Local Currency

Actual Costing

Company: Chicago

Company: Detroit
Price / material

Price / material

10: 100 USD

10: 100 USD

Requirements

Settings in FI

Requirements

Settings in FI

US dollars

10: US dollars

US dollars

10: US dollars

Material Ledger Settings in CO

Material Ledger Settings in CO

1 data record

1 data record

10: US dollars

10: US dollars

SAP AG 1999

In this example, an enterprise has its headquarters in the USA. Two companies are a part of this
enterprise. One is in Detroit, the other in Chicago.

The enterprises headquarters must generate their closing in US dollars, in accordance with the legal
requirements applying in the USA.

Because both companies are in the USA, no other currency is necessary. The same valuation method
is valid for the enterprise headquarters and both companies. Only one valuation method is necessary.

For this reason, only one currency is necessary in the SAP components Financial Accounting and
Controlling. This currency is of currency type 10: local currency, legal valuation.

With this, you can use actual costing in the material ledger to calculate actual costs for materials and,
if necessary, revaluate in legal valuation.

SAP AG

AC530

9-2

0.3
Example of Parallel Valuation
Enterprise with Headquarters in the USA
Local Currency
Actual Costing
Group Currency
Hard Currency
Company: Detroit

Company: Mexico City

Price / material

Price / material
10: 800 MXN
31: 90 USD
40: 110 USD

10: 100 USD

31: 90 USD

Requirements

Settings in FI

Requirements

Settings in FI

US dollars

10: US dollars

Mex. pesos

10: Mex. pesos

US dollars

31: US dollars

US dollars

31: US dollars
40: US dollars

Material Ledger Settings in CO

Material Ledger Settings in CO

2 data records

3 Data records

10: US dollars
31: US dollars

10: Mex. pesos

31: US dollars

SAP AG 1999

This slide shows you an enterprise with headquarters in the USA. One company of this enterprise is
located in Detroit, another in Mexico City. As in the previous example, the enterprise headquarters
generates its closing in US dollars, according to the legal requirements applying in the USA.

The company in Detroit must generate its closing in US dollars, according to the legal requirements
applying in the USA. At the same time, the company reports its closing to the enterprise that
consolidates the individual closings of all the companies. The currency used for the consolidation is
called the group currency. In the process of consolidation, all internal profits are eliminated.
The resulting valuation approach is called group valuation.

The company in Mexico City must generate its closing in Mexican pesos, according to the legal
requirements applying in Mexico. As with the company in Detroit, along with generating its closing
according to the the legal requirements applying in the country, the company in Mexico City must
also report its closing to the enterprise. This reporting must take place in the currency of the
enterprise, the group currency (USD). In addition, the closing must also be generated in a hard
currency according to Mexican law, for inflation reasons.

For the SAP system, this means that both companies define the local currency as currency type 10
(Detroit: USD, Mexico: MXN). Additionally, both companies define a group currency (currency
type 31) in USD for group valuation. The company in Mexico City also defines a hard currency
(currency type 40) in USD.

SAP AG

AC530

9-3

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Calculation of Exchange Rate Differences (With
Planned Exchange Rate)
USD

M Type

33.6

Exchange rate
valid at IR
MXN 100 = USD 12

2.
"True" price difference: USD 2.40

IR price

31.2

Planned exch.
rate drop

1.

(MXN 20 * 0.12)

Exch.rate diff.: USD 5.60

GR price

Price difference: USD -3.20 3.

P Type

(- Exch. rate diff. + "true" price difference)

28.0

Plan exch. rate valid at IR

MXN 100 = USD 10

260

GR price

280

MXN

IR price

SAP AG 1999

This example explains how exchange rate differences are calculated using exchange rate type P.
The numbers are based on the optional exercise in the exercise scenario of the course participants.

Explanation:

3)

1)

The invoice receipt of MXN 280 shows a price difference of MXN 20. Since the planned
exchange rate takes into account a fall in the exchange rate (MXN 100 drops from USD 12.00
to USD 10), an exchange rate difference of USD 5.60 is reported in the material ledger:
(280 * 0.12) - (280 * 0.10) or USD 33.60 - USD 28.0 = USD 5.60.

2)

The price difference actually translated (the "true" price difference) is USD 2.40
(MXN 20 * 0.12).

The "true" price difference less the exchange rate difference results in a remaining price
difference of USD -3.20. This price difference is reported in the material ledger.

SAP AG

AC530

9-4

0.5
Costing Sequence in the Costing Run

One-way level

...

...

Cyclical level

One-way level
One-way level

...

Cyclical level

...
One-way level

SAP AG 1999

Under Determine sequence, the system determines the sequence in which costing is later performed.
This internal function is the lower level for multilevel actual costing. Actual data concerning
movements and transactions from all areas of Logistics (Materials Management, Production
Planning, etc.) is collected in the background for quantity structure determination.

Quantity structure determination results from a preparation of actual data in order to guarantee the
prerequisites for multilevel actual costing. As opposed to the planned quantity structure, the actual
quantity structure consists of the objects (materials, routings, BOMs, etc.) that were used during
production. From the input data, the quantity structure tool creates a process model, which
contains materials, processes and procurement and consumption alternatives. This process model is
condensed to a predecessor/successor model, which only contains relations (that is quantity flows)
between materials. In a final step, the predecessor/successor model is split up into a level model,
which describes the sequence in which materials have to be processed. The update of movements and
transactions for actual costing is controlled through the controlling level of the component Actual
Costing/Material Ledger.

In the result, you see a list of the production levels (for example, Level 1 raw materials, Level 2
semi-finished products, etc.) with information concerning the respective materials determined by the
system displayed in hierarchy form. From the level overview, you can branch to the material list that
contains detailed information on the material in question. From the material list, you can branch
directly to the material ledger data.

SAP AG

AC530

9-5