Foreign Currency Transactions:

There three types of Exchange rates defined by SAP,

  • Bank Buying Rate Exports Purpose             – G Type
  • Bank Selling Rate Import/Expenditure     –B Type
  • Average Rate MM/SD Users only                 –M Type

Path: SAP⇒SAP Netweaver⇒General Settings⇒Currencies⇒Check Exchange

  • Once we follow one conversion factor, follow continuously  for all the Years.Don’t change in between,it gives wrong Results
  • Conversion Factor are given at Client level but not at Company code level.

Exchange Rates entry End user Area:  S_BSE_68000174

Path : SAP Menu ⇒ Accounting ⇒ Financial Accounting ⇒ General Ledger Environment Current Settings Enter Transaction Rates

You carry out accounting for a company code in the country currency (local
currency) of the company code. Therefore, you must specify the local currency
in the system for each company code. All other currencies used are indicated as
foreign from the point of view of the company code. There are several situations
in which you need foreign currencies:

  • to post and save receivables and payables in foreign currency
  • to make payments in foreign currency
  • to manage accounts in foreign currency (foreign currency balance sheet accounts)
  • to carry out consolidation and prepare corporate group reports.

These are the following configuration steps for foreign currencies:

1. Check Currency Codes (SPRO) : SAP solutions come with standard currency codes for the ISO company codes. Sometimes circumstances arise in which you have to define new currency. You can do so through this step.
2. Set Decimal Places for Currencies (OY04) :In this step, you will define the number of decimal places for the currency.
3. Check Exchange Rate Types (SPRO) : In this step, you will define exchange rate types, which you will use later on for various transactions.

4. Define Valuation Methods (OB59) : To valuate foreign currencies, you need at least one valuation method. With the valuation methods, you will define how to handle foreign currency valuation methods and the exchange rate types you are going to use. In a high-level valuation method, you will hold various parameters for foreign currency valuations.
5. Prepare Automatic Postings for Foreign Currency Valuation
(OBA1): In this step, you will assign various G/L accounts to record foreign valuation
differences.These are the following application steps for foreign currencies:
6. Enter Exchange Rates (SPRO):
In this step, you will enter exchange rates to convert one currency to another.
7. Foreign Currency Valuation (F.05):This transaction code is used to valuate foreign currencies. Foreign currencyincome and expenses will be recorded in the respective account defined through transaction code OBA1.



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