I'm trying to understand the strict lowest value principle in FX revaluation. I understand that it will make a posting if 'new valuation has a greater devaluation and/or a greater revaluation for credit entries than the previous valuation.'
1. Does this mean only losses are posted?
2. How does this differ from the lowest value principle?
I have looked around the forum but still confused.
Lowest Value Principle:
The valuation is only displayed if the valuation difference between the local currency amount and the valued amount is negative, that is an exchange rate loss has taken place. The valuation is calculated per item total.
Strict lowest value principle
The valuation is only displayed if, as a consequence, the new valuation has a greater devaluation and/or a greater revaluation for credit entries than the previous valuation.
This essentially mean that strict lowest does consider the profit as well provided it is greater revaluation than the previous valuation.
Thanks murlidhar, but I am still a bit confused. If it allows a write-up, why would it be known as the strict lowest value principle?
Also what are they referring to in the definition when they say 'greater revaluation for credit entries'??
I am looking here http://www.daypo.net/test-sap-fi-tfin50_2-unit-12-receivables-payables.html and question 12 seems to contradict what you are saying,