Valuate Foreign Currency in the Period End

[chandrasekharbadeti_chand]

Hi Friends,

Which method is used to Valuate Foreign Currency in the Period End? (We used Average Rate method at the time of transaction posting) I have a doubt whether we have to use same average rate method at the period end or not.

Thanks

Chandra

[chandrasekharbadeti_chand]

Yes, Problem solved

[Former Member]

Hi,

The valuation of Open items in Foreign Currency depends on your country's statutory requirements.

In SPRO in the menu path valuate -> foreign Exchnage.... you can define exchange rate type for debtors and creditors separately.. as per your requirement...

For example in India you have to valuate Debtors at the Bank selling rate and the creditors at bank buying rate..so you can maintain it there.. in the config.

Please let me know if there is anything else that you want...

Regards,

SAPFICO

[chandrasekharbadeti_chand]

Hi Friends/Experts,

Thansk for your valuable suggestions. Still I have small confusion.

Issue: Forex Valuation at the Period End for Both Open Items and Non Open Items

Note: Posted all Forex line items of GL/AR/AP in Average rate (M) Type.

Now I am Valuating all Open Items and Non Open Items. Which Rate type I have to use for GL/AR/AP.

Could you please analyze and explain my problem as given above?

Thanks

Chandra

[chandrasekharbadeti_chand]

Dear Friend SAPFICO,

Thanks for the suggestion.

As you said, valuate Debtors at the Bank Selling rate and the Creditors at Bank Buying rate.

Is it correct (or) valuate Debtors at the Bank Buying rate and the Creditors at Bank Selling rate is correct.

Could you please clarify Which one is correct in the above 2 statements?

Thanks

Chandra

[Former Member]

Hi BCSJVS,

when we make payments to out creditors bank charges us at the bank buying rate so the auditors always insist on revaluating the creditors at the bank buying rate as on the closing period and when you recv money from the debtors, then the bank credits at the bank selling rate to your account .. so any debit balance in your books be it from creditors or debitors is always to be valued at selling rate and vice versa for creditors..

This is why I had written in my prev. mail that you can maintain exchange rate type for valuing your debtors and creditors separately in the config..

Hope it is clear.. if not do write back..

Regards,

SAPFICO

[chandrasekharbadeti_chand]

Dear SAPFICO,

Thanks for your very good explanation.

Bank Selling Rate will be more than Bank Buying Rate correct?

Thanks

Chandra

[chandrasekharbadeti_chand]

Hi Friends,

Could you please correct me, which one is correct: Bank Selling Rate is more (or) Bank Buying Rate is more.

Thanks

Chandra

[Former Member]

Buying rate is usually higher than the selling rate..but how does this matter in revaluation.. these rates are given by the banks and are the RBI rates..

Regards,

SAPFICO

[chandrasekharbadeti_chand]

Dear Friend,

You mean, Bank Buying Rate (G Type) is usually higher than the Bank Selling Rate (B Type) in OB08 screen. Correct.

Thanks

Chandra

[Former Member]

My Dear Friend,

OB08 is a master data screen..rates are entered there by the user against the particular echange rate type for different currencies..So whatever you enter there, you will see that..highere or lower depends on what rates are given by the bank.. if it is higher you will maintain and see higher and if it is lower you will maintain and see lower..

Secondly, if you want to use the concept of revaluation at the bank buying rate and the bank selling rate, then you will first have to define two exchange rate type for that and also maintain that in the config for valuate - Foreign Exchange.. and against these exchange rate types, you have to maintain the bank buying rate and bank selling rate in OB08.

Regards,

SAPFICO

[chandrasekharbadeti_chand]

Hi Dear Friend,

Its ok I will configure as you said in OB08 screen.

Please confirm this, Bank Buying Rate (G Type) is usually higher than the Bank Selling Rate (B Type) in OB08 screen. Correct.

Thanks

Chandra

[chandrasekharbadeti_chand]

Dear Friend,

Can you give the URL where I can check the Bank Buying Rates and Bank Selling Rates as per Indian SAP requiriments.

Thanks

Chandra

[Former Member]

Hi,

I dont have the URL.. but ask any Bank or search on google and they will be having a rate chart for this..

ANY BANK will be able to give you this.. ask your core users.. to provide you with this.. and remember it is not SAP requirement it is a statutory requirement..which we map in SAP

Hope things are clear now..

Regards,

SAPFICO

[chandrasekharbadeti_chand]

Dear Friend,

Please correct me friend, Is Bank Buying Rate (G Type) is usually higher than the Bank Selling Rate (B Type) in OB08 screen.

Is it correct. really confused in this.

Thanks

Chandra

[Former Member]

YES IT IS.

[chandrasekharbadeti_chand]

Dear Friend

Thanks a lot.

Thanks

Chandra

[former_member221515]

This message was moderated.

[Former Member]

Hi,

M rate is used only while posting the transaction in other than company code currency. While revaluation of open items during period end close, normally C rate is used. Difference between M and C rate is calculated and posted as revaluation entry at the period close. The same shall be reversed during opening of next period.

Thanks,

Sreeni.