Foreign Currency Revaluation

The Foreign Currency Revaluation enables you to revaluate open items (Vendor, Customer
and General Ledger) which are posted in foreign currency. Companies can then use the Post
Foreign Currency Revaluation to post the revaluation differences to the relevant
vendor/customer account and to the currency revaluation profit/loss account.

 Realized Gain or Loss: Realized Gain or Loss will post when we make payment to
vendors or when we receive payment from customers

 Unrealized Gain or Loss: This is just a provisional entry when we run the Foreign
Currency Revaluation at the month end for customer/vendor/GL open items which are
posted in foreign currency and the same transactions will be reversed in the next month
first day or first week

Before the start of configuration, get the below details

Accounting Description of Accounting

Ledgers GAAP Currency Principle Principle

10 (Company Accounting Principle

0L USGAAP Code Currency--INR) BM0L for USGAAP

Local 30 (Group Accounting Principle

B2 GAAP Currency---USD) BMB2 for Local GAAP

40 (Hard Accounting Principle

Y1 IFRS Currency--EUR) BMY1 for IFRS

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Configuration Settings for FCR

1. Define Valuation Methods (T Code OB59)

We are going to create 3 valuation methods as we have 3 ledgers (1 Leading and 2 Non-
Leading). If you have created ledgers more or less, need to create as per your ledgers.

Valuation Method
BM01
BM02
BM03

Once you execute, click on new entry

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BM01-Valuation Method for USGAAP

Once you create BM01, click on next entry as shown above

BM02-Valuation Method for Local GAAP

Once you create BM02, click on next entry as shown above

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 BM03-Valuation Method for IFRS

Once you create all 3 of your valuation methods, click on save

2. Define Valuation Area (T Code: S_AL0_19000080)

Path:

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Once you execute, click on new entry and follow below step

Once you enter Valuation Area, Valuation Method and Currency, scroll right side and
provide description for all 3 valuation Area as shown below

Then Click on SAVE

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3. Check Assignment of Accounting Principle to Ledger Group

Note: This step is already created in ledger creation level so if you have done at the
ledger level, no need to create if not done, please create here

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4. Assign Valuation Areas and Accounting Principles

Path:

Once you execute, click on new entry as shown below

Provide your Valuation Area create in the second step and Accounting Principle and click
on SAVE as shown below

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5. Prepare Automatic Postings for Foreign Currency Valuation (T Code OBA1)

Before the above step, create another 3 GL Accounts

I. Foreign Currency Loss (Unrealized)

FSP0 (Group GL)

FSP0 (Country Specific GL)

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FS00 (Primary GL)

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II. Foreign Currency Gain (Unrealized)

FSP0 (Group GL)

FSP0 (Country Specific GL)

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FS00 (Primary GL)

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III. Provision for FCR
IV. FSP0 (Group GL)

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FSP0 (Country Specific GL)

FS00 (Primary GL)

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 Once you create all 3 GL Accounts, go to the below path and assign GL Accounts

Note: Already you have assigned Realized Gain or Loss GL accounts for your
Reconciliation Accounts (At the time of AP and AR)

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Path:

Once you execute, double click on KDF as shown below

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 Once you enter, double click on each of your Reconciliation GL account and assign
Foreign Currency Loss GL (Unrealized), Foreign Currency Gain GL (Unrealized) and Provision
for FCR GL accounts then click on saves (as shown below)

Note: If you have not assigned Realized Gain or Loss GL at the time of AP or AR, please
assign in the first 2 fields

Note: Follow the same for all of your reconciliation GL Account

END USER ACTIVITY/FOREIGN CURRENCY REVALUATION

(T CODE FAGL_FC_VAL)

Step1. Post some vendor invoices and Customer Invoices in Foreign

Currency

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FB70 (Customer Invoice)

FB60 (Vendor Invoice)

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Step2. Run t code FAGL_FC_VAL

Once you execute, provide below details as shown in the screen shot

Go to Open Item Tab and provide below information as shown in the screen shot below

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No need to provide anything in the G/L Balance tab so just view and click on SAVE button to
save the details for your future execution purpose (save as variant) as shown below

Note: the above variant creation is to minimize your work whenever you come to this
screen, you can select the saved variant and make changes then you can execute so no need
to create every time

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Then Click on Execute as shown below

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Note: go to FB03 and provide above document numbers to view transactions

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Step3. How to reverse the FCR transaction (reason might be incorrect rate
maintained or some errors are there)

Come to the main page and follow the below steps

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Step4. Run the FCR transaction after correcting errors or maintaining correct
exchange rate

Come to main screen and uncheck the reset valuation and remove reason for reset then
execute as shown below

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 Go to document display t code (FB03) and display all the above documents then review
the entry

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