Foreign and Local currency balance difference in GL

[Former Member]

Dear All,

I have a GL for Bank in which entries are posted manually through F-02. GL is maintained on company code currency (Say INR). The transactions posted are in foreign currency (ex USD).

when we check the balance of the account in FBL3N it is showing FC balance as zero and Local currency balance as 100 INR.

The above situation is due to the following

Received Amount 100 USD @ 40 = 4000 INR (manually posted JV)

Credited amount 100 USD @ 39 = 3900 INR (Manually posted through JV).

As both the activity is done through JV the system dint prompt for exchange rate difference account. So no my question is:

1. In this scenario, is there any why the system can automatically post entry to exchange rate difference Or posting Manual JV is the only way out.

2. What is the use of Tcode F.05. What it actually does.

Thanks for your valuable time.

Please let me know if you need any additional details

Regards

Naveen

[Former Member · Accepted solution]

Dear,

May be you have set Bank G/L as "Only balance in local currency". If so then you have to select Post per line item and not to select Balance Valuation in Valuation Method.

Regards,

Chintan Joshi.

[Former Member · Accepted solution]

Thanks for you reply Chintan,

But it will be great if you can be more specific and Elaborate.

Note: The account in question is not open item managed.

Regards

Naveen

Edited by: Naveen Singh on Dec 22, 2009 4:36 PM

[Former Member · Accepted solution]

Dude,

I would recommend you do the following first;

Post another manual jv of the difference either debit or credit and along with Foreing currency gain or loss account.

In future for second entry (where you had used ex rate 39) use post with clearing function in order to generate the system to automatically select forex account. However in this case account should be maintained on open item managment basis.

regards,

Edited by: GUEST FICO on Dec 22, 2009 1:04 PM

Edited by: GUEST FICO on Dec 22, 2009 1:05 PM

[Former Member · Accepted solution]

But is there any other way out apart from passing a JV.

More over we cant do post with clearing as, it is main bank account and the amount deposited will not correspond to the withdrawals.

Regards

Naveen

[Former Member · Accepted solution]

Hi

Could you please explain as what do you mean by FC Balance.

If you mean that Balance in Document Currency is ZERO but the Balance in Local Currency is 100 then I belive it is correct.

In your example you received 100 USD @ 40 and you paid 100 USD @ 39 hence there is balance of 100 INR.

But if you have Group Currency and it is also USD then you may have situation like 100 INR balance in Local Currency but Zero in Group Currency.

This will be corrected when you do Translation with F.05

Balance in Local Currency(100 INR) will be taken as basis and the same will be translated using Month End Rate and the difference between this new value(100 INR = 2 USD @ 50 ) and the value in Books(ZERO USD) will be posted.

e.g. if the month end rate is 50 then Balance in Group Currency should be 2 USD. Since Group Currency balance is ZERO, a posting will be made for 2 USD. These Translation postings will be made only Group Currency with ZERO in Local Currency.

Hope it explains.

Thanks

Prasad

Edited by: Prasad Neelisetty on Dec 23, 2009 12:12 AM

[Former Member · Accepted solution]

Dear Prasad,

FC stands for foreign currency.

I am not maintaining any group currency in system.

I am still wondering how will this excess be knocked off.

Looking for your guidance. Even JV will not work

Regards

Naveen

[Former Member · Accepted solution]

Hi

Since you do not have any parallel currency, The balance of 100 INR in Local Currency is correct. There is no need to write it off.

My understanding is that the transactions are as below.

Transaction Doc Curr Doc Curr Amt Loc Curr Loc Curr Amt

1 USD 100.00 INR 4000.00

2 USD -100.00 INR -3900.00

Balance 0.00 100.00

You have a Bank Account which is maintained in INR.

In first transaction, you have a receipt of 100$ and bank has applied a rate of 1USD = 40 INR. So the balance is 4000 INR.

Then you have made a payment of 100$ and bank has applied a rate of 1USD = 39 INR. So you still have 100 INR.

That is not a gain or loos. It is valid balance.

Thanks

Prasad

Edited by: Prasad Neelisetty on Dec 23, 2009 8:35 PM

Edited by: Prasad Neelisetty on Dec 23, 2009 8:36 PM

[former_member740750 · Accepted solution]

HI:

If we select Open Item Managed and Balances in Local currency in the GL master data, what would be the impact of BILCO (Balances in local currency) flag.

Appreciate your reply.