GR/IR Clearing

[Former Member]

Disclaimer: I have tried my very best to search the SCN forums to answer my question but I have not found any sufficient answers.

Hi,

I have 2 questions regarding GR/IR clearing (MR11/F,13):

1. Why is it that GR/IR clearing can only be done in local currency?

2. If I want to process a foreign currency account through GR/IR, how will I do it?

Thanks,

Josef

[ajaycwa1981 · Accepted solution]

Hi Josef

As Kevin said, clearing will always be done in Local Currency

There are some companies, who depending on Vendor groups or country of import, use a different GR/IR account.. For this, you need to implement the exit LMR1M002 to change the GR/IR account during MIGO / MIRO

Br. Ajay M

[ajaycwa1981 · Accepted solution]

Hi Josef

I would like to rephrase my answer

Clearing takes place when Amounts in Document Currency match.. Even SAP Help for F.13 says this

Imagine this case (Local Curr USD and Trans Curr is EUR)

1. Stock Dr and GR IR Cr - > 100 EUR / 75 USD

2. GRIR Dr and Vendor Cr -> 100 EUR / 78 USD

3. Vendor Dr and Bank Cr - > 100 EUR / 80 USD

This means, for a stock worth 75 USD, you are paying 80 USD (Due to Fx fluctuation)... This 5 should be accounted as loss

The loss from 78 -> 80 USD will be accounted as realized fx loss during F110 (payment)

The loss from 75 -> 78 USD should be accounted during GRIR clearing in my opinion... Thats how the total loss of 5 USD will be accounted

Br. Ajay M

[Former Member · Accepted solution]

Hi Ajay,

So technically, it isn't only local currency that can use GR/IR? Foreign currency have local currency counterpart and can have GR/IR as well? Am I getting this right?

Thanks,

Josef

[ajaycwa1981 · Accepted solution]

Yes Josef.. Thats right

Br. Ajay M

[ajaycwa1981 · Accepted solution]

Hi Josef

Did a further checking and read some SAP documentation.. I have few more clarity for you

Read this

Exchange rate differences in the case of open items (KDM)
Exchange rate differences in the case of open items arise when an invoice relating to a purchase order is posted with a different exchange rate to that of the goods receipt and the material cannot be debited or credited due to standard price control or stock undercoverage/shortage.
Differences due to exchange rate rounding, Materials Management (KDR)
An exchange rate rounding difference can arise in the case of an invoice made out in a foreign currency. If a difference arises when the posting lines are translated into local currency (as a result of rounding), the system automatically generates a posting line for this rounding difference.

Between MIGO and MIRO, if there is a Fx rate difference - > It either goes to Stock (Provided the Price Control is V and sufficient Stock coverage is there) OR it goes to the GL account assigned in KDM

So, that means, the Value of GR/IR Account at the time of MIGO and MIRO - both in Local Curr and Transaction Currency will always be same

Br. Ajay M

[former_member188063]

Hi Josef,

Go through the below note it may shed some light as well.

1644255 - Foreign Currency ValuationXXXXXGR/IR Clearing A/C

Regards,

Sudhakar*

[kevinharradine]

Hi Josef

A mixture of currencies would make it hard to reconcile the GR/IR account so it is a matter of simplification.  You can have more than one GR/IR account within a company code if you want to track multiple currencies but the clearing will still run in local. I would use separate vendor groups for the different currencies. 

Each document has a document currency, local currency and group currency. So your documents can be in whichever currency they should be as long as you are setup to convert this to the local currency at the time of document creation.  If the documents you are clearing balance in foreign currency but don't balance in local currency you may need to do a revaluation or post a balancing entry in the local currency.

I hope that this helps.

Regards

Kevin

[Former Member]

Hi Kevin,

Thanks for the response!

So what you are trying to say is that for foreign currency accounts that I want to have GR/IR, I need to do foreign revaluation first?

Josef