Forex cycle in TRM

[Ahmed_Samir]

Dear,

Hi, I post this question earlier, and I was wondering if it’s applicable on SAP TRM, it’s related to calculate the cost of sales for the currencies and determine the revenues.

My cycle for now is (let’s assume that the company’s local currency is SAR, and wants to buy 1000 USD and the rate is 1 USD = 3.73 SAR for purchasing)

Creating the order/contract then settle them and them Post to financial which will generate the below entry

	Document currency	Local currency SAR
USD Account Cr. Position	1000 1000	3730 3730
Position Cr. SAR Account	3730 3730	3730 3730

Now if another transaction happened purchasing 100 USD and the rate is 1 USD = 3.75 SAR , the below entry for the spot transaction will appear

c	Document currency	Local currency SAR
USD Account Cr. Position	100 100	375 375
Position Cr. SAR Account	375 375	375 375

If I sell 500 USD for 3.77 rate with SAR the entry will be:

c	Document currency	Local currency SAR
SAR Account Cr. Position	1885 1885	1885 1885
Position Cr. SAR Account	500 500	1885 1885

Now I really don’t know what should happened next, I mean how to calculate the cost of sales, the customer wants to calculate it based on the average price for the purchased rate which should be 3.74*500 = 1870

which means that my profit is  1885 - 1870=15 SAR.

How to make such a cycle on SAP, your assist is really appreciated.

Thanks and Best Regards,

[Former Member]

Hi Samir,

Are you talking about posting gain and loss?

Use TPM18 to calculate the gain and loss. System will use FLA (floating average price) as a base for profit/loss calculation.

Regards,

Manish

[Ahmed_Samir]

Dear Manish,

Thanks for your respond, how to make the system use the floating average price,, what is the required configuration in the position management procedure as i saw a lot  of fields related to the exchange rate type and all of them use "M".

Thanks and regards,

Ahmed Samir

[rohitbali]

Hi Ahmed,

Make changes in your position management procedure for foreign currency valuation.

Try with write up to purchase value and see the results.

Thanks

Rohit

[Ahmed_Samir]

Dear Rohit,

Thanks for your respond, with reference to the best practice, I'm using Rate valuation for forward exchange transaction for the spot exchange valuation, do you mean changing the write-up rule?

so how the system will use the purchase rate when all what i see is the exchange rate M?

your assistant is really appreciated

Regards,

Ahmed Samir