Balance on Project Budget due to Currency Conversion

[Former Member]

Dear Gurus,

we got an issue here in Project Budget's reporting.

The issue appears when Business assigns the budget to the Project in local currency & then budget is not used but brought forward to
next year.

At the moment of Budget assignment, the Budget amount in local currency is also converted into Controlling area Currency. At the year
end, when the carry forward to next year happens, the same amount in local currency is also converted into Controlling area Currency again, but as the exchange rate is normally different, the Controlling area currency amount is different.

So when the reporting is run for the project in Controlling area currency it seems like there is a variance & budget is over-used (or
under-used).

So if Budgeting is performed in Controlling Area currency, there will be the mirror issue but with balances in a Controlling area Currency Reporting.

The question is – if it is possible to carry forward so that amounts in both currencies are the same as the beginning of the year & artificial balances are not created?

Thank you very much in advance!:)

[Paulo_Vitoriano]

I liked the exchange rate as a starting point.  The budget availability control must happen in the same currency in which it is maintained.

If the budget is maintained in the local currency, it has to be controlled in the same local currency, therefore you will not face any currency exchange differences.  Instead you can revaluate it at the beginning of each year with a supplement or return.  It is rather about the process, and not about the system.

If you maintain the budget in so called hard currency like USD, you should run availability control also in USD, and again there are no exchange rate implications since you always deal with the same currency and carry forward same currency.

The value in another currency (in which availability control is not performed) has no practical implication, but is just informative if relevant at all.

[Former Member]

Hi Daria,

Budget is always carried forward in the controlling area currency that means budget line items entered in a different currency are also carried forward.

You can refer following SAP note for more details as well.

906975 - Currency translation in planning and budgeting

Regards

Tushar