Foreign Currency Translation

[Former Member]

Hi,

In the configuration of exchange rate differences for GL open items (transaction OBA1), when are those accounts configured under section 'Translation' used?

Thanks.

[atif_farooq · Accepted solution]

Dear:

In OBA1 you set reconciliation accounts as well as GRIR clearing accounts that pertains to PO routed through MM.

Regards

[Former Member · Accepted solution]

Hi,

I understand that there is a need to configure for reconciliation and clearing accounts but actually my question is in the configuration, you need to configure accounts under 3 categories:

a. exchange rate differences

b. valuation differences

c. translation differences

Would like to know when would there be postings made to accounts configured under (c).

Thanks.

[atif_farooq · Accepted solution]

Dear:

As per IAS 21 Translation differences occurs when the assets and liabilities are exposed to exchange rate fluctuations. This exchange rate fluctuation affect the asset and liability balances which must be translated in financial statement at balance sheet date when you post valuation differences. This is for your information. Hope this will clear now

Regards

[Marssel700 · Accepted solution]

Hi

There will be postings when you create a posting in a different currency from your co.cde. You define account determination in OBA1 and rate in OB08.

Take your processes and make test to be sure on results.

a. exchange rate differences

b. valuation differences

c. translation differences

[Marssel700]

Hi,

these transactions are related to F.05 to attend all currencies definitions, rounding and payments differences. You define which accounts will take amounts on those processes. Transaction KDF is the most regular. You set reconciliation account and the account that will take the exchange rate differences.

I hope it's helpful.

Reagrds