Foreign Currency Revaluation Issue

[former_member273958]

Client loan agreement was entered in USD with the US counterparts, wherein the remittance by us  was in INR and not USD, due to regulatory limitation.

• The amount was recorded in the books in INR as the remittance was made through an INR account. In future the loan will be repaid in USD as the agreement was made in USD.

• The crux of the matter is that the forex impact on this transaction should  be computed from the point of view of Revaluation (USD –INR transaction) meaning the Local currency and document currency being USD and LC2 being INR.  Right now the system is computing the forex impact from the point of view Re-measurement or Translation (INR to USD) as the bank account is INR ( in GL Master) which should not be the as we need to look the concept of substance over form over here.

Kindly please provide a Solution.

Thanks & Regards

VB

[former_member273958]

As this G/l is having USD as currency in the G/L master data.So the revaluation needs tobe done from (USD-INR).So what is solution.

KIndly guide me dependencies of T Codes involved in it.

Thanks & Regards

VB

[DaveS4]

Vineet,

Please review the attached material and the steps that I have described and compare how your system is designed. Without having a good understanding of what FX revaluation is doing and how the your system was configured, it is impossible to jump to the conclusion. All of the dependencies and tcodes are described in the attached link.

Regards,

Dave

[DaveS4]

Hi Vineeth,

The system is doing right as you have recorded the first entry in INR, but not USD. therefore there is nothing to translate on that.

If you were recorded the initial entry in USD then the system would have translated it from the CoCd currency to the transaction currency.

Am I missing something?

regards,

Dave

[former_member273958]

As this G/l is having USD as currency in the G/L master data.So the revaluation needs tobe done from (USD-INR).So what is solution.

KIndly guide me dependencies of T Codes involved in it.

Thanks & Regards

VB

[DaveS4]

Hi Vineet,

The revaluation is a 2 step process and every month end these 2 steps need to be executed:

Ensure that the document date/posting date  (depending on OB22 config) currency rates are different than the period end date currency rates. Otherwise there is no FX reval postings.

On F.05 tcode there is header data and also tabs:

0) Use/create a Valuation Method through OB59 with "Always revaluate" option

1) In the header data select the "Valuation in Curr type = "30", depending on how you configured the OB22 tcode for the company code mentioned.

2) In "Postings" tab, check "Balance Sheet prep valuation"

3) "Open items" , select the BSheet accounts to be revaluated. These accounts need to be configured in OBA1 tcode fo5r automatic postings with KDF key.

4) In "G/L balances" tab you will see the accounts already in the Open Items tab and at a minimum check "Valuate G/L balances"

5) In "FASB 52" tab:

     a) Execute 1st the option "Translate valuation difference" (note the results)

     b) Execute 2nd (uncheck the (a) above and check "Use translation" (note results & posting)

In addition to the above please check the below wiki page for a lot of information about FX reval process:

Foreign Currency Valuation - ERP Financials - SCN Wiki

regards,

Dave