4 Replies Latest reply: Mar 10, 2010 1:35 PM by prasad naga RSS

Difference between Amount in local currency and Amount in Group Currency

prasad naga
Currently Being Moderated

Hi,

 

My client's is having different company codes. One company code(ABC) is using GBP as a local currency anotther company code(XYZ) is using EUR as a local currency. They are using GBP as a group currency.

 

Co.code:ABC posted a goods receipt(gr/ir) in march 2009 for 90 euros. then system convert the euros into local currency as 75 and group currency as 75gbp, so we don't have any issue at this moment.

 

They raised a invoice verification(MIRO) in April 2009 for the above line item -90, then system convert the euros into local curreny as 80 gbp, and group currency as 82 gbp.  Here we observed that, there is difference between local currency and group currency as 80 and 82.  As per the rates maintained in OB08, group currency 82 is correct value.

 

 

Can anybody please let me know, why the system is showing different values for local currency and group currency, when both are using GBP?

 

 

Thanks in advance

Prasad

  • Re: Difference between Amount in local currency and Amount in Group Currency
    Gladys Xing
    Currently Being Moderated

    Hi Prasad,

    In Logistics Invoice Verification, when you enter an invoice in foreign

    currency, the system automatically translates the foreign currency

    amounts to local currency. The system calculates the exchange rate using

    the following rule:

     

    1.If the buyer entered a fixed exchange rate in the purchase order, the

    system uses this rate to translate the amounts to local currency.

    2.If an exchange rate was entered in Invoice Verification, the system

    uses this rate to translate the amounts to local currency.

    3.If an exchange rate was entered neither in the purchase order nor in

    Invoice Verification, the system uses the exchange rate pre-defined in

    Customizing for Financial Accounting valid for the posting date.

     

    Exchange Rate Differences

     

    If a purchase order is entered in foreign currency,the amounts are

    translated from foreign currency into local currency at goods receipt.

    If you enter the invoice for the purchase order in the foreign currency,

    this can lead to currency translation differences between the goods

    receipt and the invoice receipt.

    How these differences are posted depends on how your system is

    configured in Customizing for Invoice Verification

     

    Exchange Rate Rounding Differences

     

    When an invoice is posted in a foreign currency, the amounts are translated into local currency.Since the system rounds off the amounts in each posting line, this can lead to rounding differences due to the currency translation.

     

    These differences are posted to an expense or income account.

     

    Addition in transaction OB22 for the second local currency, it should be defined 'Translation taking transaction currency as a basis' is defined.

     

    Pls. also  refer to note:335608  Trnsln of 2nd and 3rd lcl crcy fm 1st lcl/trns crcy.

     

    I hope the above information helps you out......

     

    Best Regards,

    Gladys Xing

  • Re: Difference between Amount in local currency and Amount in Group Currency
    Jay-R Cruz
    Currently Being Moderated

    Hello,

     

    For example, amount in group currency EUR is not equal to amount in document currency even if document is posted in EUR.

     

    This is usually due to the company codeu2019s settings for parallel currency and exchange rate differences.

     

    Go to IMG -> Fin Acctg -> Fin Acctg Global settings -> Company Code -> Multiple Currencies -> Define Additional Local Currencies

     

    For the specific company code, check the field for the u201CSrce Curru201D (source currency) for the group currency.

     

    If this is set to u201C1u201D (Translation taking transaction currency as a basis), check the exchange rate for EUR : EUR.  This should be set as 1: 1.

     

    If this is set to u201C2u201D (Translation taking first local currency as a basis), check the exchange rate for the local currency : group currency and the inverse pairs (example: MYR: EUR and EUR:MYR).  The rate for these two pairs should only be the inverse of each other.

     

    Hope this answers your question.

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