exchange difference in cost of sales

Fred Chan Feb 10, 2012 3:35 AM

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Dear all,

Our company is US listed company based in PRC. We encounter the following problem.

1. We receive sales orders in USD and purchase materials in USD.

2. We record the transactions in RMB (PRC currency) by using the current exchange rate in system (e.g. USD:RMB=6.3)

3. We convert the transactions from RMB to USD by using average exchange rate (e.g. USD:RMB=6) when we generate the US GAAP report

4. An exchange difference occur, and we have to make adjustment

I think the above process could be improved by properly change the system settings or operation, but I don't know how. Could anybody give me some ideas?

Thanks a lot!

Fred

Re: exchange difference in cost of sales

Bhavani Shankar Feb 18, 2012 9:47 PM (in response to Fred Chan)

Currently Being Moderated

Dear Expert,

In the Tcode OBA1 give the exchange loss realised GL account and Exchange Gain Account Realized Account.

Both of them are P&L accounts.

The control account is the Sundry creditors Account a Recon A/c. This is a balance Sheet account

When you run the Tcode FAGL_FC_VAL
The batch input posts to the respective accounts

Regards,

Shankar K B
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- Re: exchange difference in cost of sales
  
  James Frank Mar 5, 2012 7:06 AM (in response to Bhavani Shankar)
  
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  Hey Shankar,
  
  Your reply is just simply awesome.
  
  Report Abuse
  
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Re: exchange difference in cost of sales

RAHEEM BAKSH Mar 4, 2012 6:53 AM (in response to Fred Chan)

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Dear MFchan,

Please go with Shanker's view and also refer below link-

http://wiki.sdn.sap.com/wiki/display/ERPFI/ExchangeRateCustomizing

Regards
Raheem

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