3 Replies Latest reply: Jul 5, 2012 9:01 AM by Jimmy Michael RSS

Exchange rate differences

Joseph Antony
Currently Being Moderated

     Hi All,

     I have a question regarding Draw Document Wizard in AP Invoice.


I created a GRPO on 03-07-12 with an exchange rate of 63 and on 04-07-12, i created a GRPO with an exchange rate of 64.

Now when i try to create an AP Invoice on 05-05-12 with an exchange rate of say 70, it posts the difference to Allocation account which in LC is correct but in the FC it shows incorrect value.

How can i correct this entry of the allocation account? For instance in this case, my system currency and the document currency were the same i.e. euro. So, f i run the conversion differences (under financial), it corrects the amount in SC and as mentioned earlier, the amount in LC is also correct. How to adjust the FC of the allocation amount?


Also, the options on draw document wizard does not help (first two). Any suggestions on how to use the right radio button to avoid these exchnage rate differences in Allocation account?


Please let me know.




  • Re: Exchange rate differences
    Jimmy Michael
    Currently Being Moderated

    Hi Joseph,


    YOu may check this sap note solution part :


      924118  - AP Inv based on GRPO. Allocation account in FC not balanced.    
    Version   7   Validity: 03.11.2010 - active
    Language   English 

    Content:      Summary    |    Header Data    |    Validity 




    When basing an A/P Invoice on a Goods Receipt PO, the Allocation Account  has to be balanced in the Local Currency only. This means that in the  Journal Entry of the A/P Invoice, the amount posted in the Allocation  Account should reverse the amount posted in the Allocation Account in the Goods Receipt PO Journal Entry.


    Here is a sample scenario:
    On 01.01.2010, a Goods Receipt PO was posted for a Foreign Currency Vendor with amount of 100 in FC, an exchange rate of 1 FC = 2.00 LC on that day.


    During the same day, a Delivery was posted for this item bringing the On hand quantity down to 0.00.


    On 02.01.2010, an A/P Invoice was posted based on the Goods Receipt PO with the same amount of 100 in FC, but the rate has changed to 1 FC = 3.00 LC on that day.


    Goods Receipt PO Journal Entry
                  Debit/Credit(LC)  Debit/Credit(FC)
    Stock          200                100
    Allocation    -200                -100


    AP Invoice Journal Entry
                                Debit/Credit(LC)   Debit/Credit(FC)
    Vendor                      -300                -100
    Allocation                    200                66.67
    Inventory Exch. Rate
    Differences(COGS)            100                33.33


    The Allocation Account balances out in the Local Currency. However, in Foreign  Currency it is not balanced out because of the Exchange Rate differences.


    On 01.01.2010, 100 (FC) was equal to 200 (LC) when the rate was 1 FC =  2.00 LC, but on 02.01.2010, 100(FC) was equal to 66.67 (LC) because the rate was 1 FC = 3.00 LC on that date.


    The difference is then posted into Exchange Rate Difference Account if  the item is no longer in stock or into Stock Account if the item is on-hand.



    Functionality Description



    This behavior is according to the definitions.


    Other terms

    A/P Invoice, GRPO, FC, Foreign currency, Rate differences, exchange, local, foreign, SAP Business One


    Header Data

    Released On 03.11.2010 12:48:15   
    Release Status Released for Customer   
    Component SBO-PUR Purchasing - A/P  
    Other Components
    SBO-SH-PUR Purchasing

    SBO-SH-PUR-INV A/P Invoice


    Priority   Recommendations/additional info   
    Category   Consulting   


    Software Component



    2004 A

    2005 A

    2007 A

    2007 B





    Based on its solution, it is the current behavior of sap b1.


    you can use exchange rate differences to adjust the unbalance amount.




    • Re: Exchange rate differences
      Joseph Antony
      Currently Being Moderated

      Hi Jimmy,

      Thanks, for the details, yes by running the exchange rate differences, I think we can correct the balance of allocation account in Fc as well.

      However, i would still like to know about the first two options in draw doc wizard, which says : use base doc exchange rate and use doc and base row exchange rate? Because, if these options work right (as teh description itself), it would not cause this change.

      As you can see, if we create a goods return based on GRPO, it would not allow you to change the exchange rate even if you put any posting date and by doing so, the right entries are reversed. But the point here is that we cannot create 1 goods return for multiple GRPO's.

      I would not say the same but somewhat similar is expected from AP invoice but it does not happen? I guess its a limitation of the system, or if you think there's any other way to make the system work, please let me know.