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    Local Currency and Global Currency

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    SOUMEN DAS
    The document discusses the differences between the exchange rate fields in the sales order header under the Sales view and Accounting view. The exchange rate in the Sales view is used for price determination and converting prices between the document currency and local currency. The exchange rate in the Accounting view is used for financial postings when an invoice is created. It also discusses how the document currency and condition record currency work in sales orders, with the system always converting the item value to the document currency.

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    Local Currency and Global Currency

    Uploaded by

    SOUMEN DAS
    46 views4 pages
    The document discusses the differences between the exchange rate fields in the sales order header under the Sales view and Accounting view. The exchange rate in the Sales view is used for price determination and converting prices between the document currency and local currency. The exchange rate in the Accounting view is used for financial postings when an invoice is created. It also discusses how the document currency and condition record currency work in sales orders, with the system always converting the item value to the document currency.

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    The document discusses the differences between the exchange rate fields in the sales order header under the Sales view and Accounting view. The exchange rate in the Sales view is used for price determination and converting prices between the document currency and local currency. The exchange rate in the Accounting view is used for financial postings when an invoice is created. It also discusses how the document currency and condition record currency work in sales orders, with the system always converting the item value to the document currency.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    46 views4 pages

    Local Currency and Global Currency

    Uploaded by

    SOUMEN DAS
    The document discusses the differences between the exchange rate fields in the sales order header under the Sales view and Accounting view. The exchange rate in the Sales view is used for price determination and converting prices between the document currency and local currency. The exchange rate in the Accounting view is used for financial postings when an invoice is created. It also discusses how the document currency and condition record currency work in sales orders, with the system always converting the item value to the document currency.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 4

    Exchange Rate Fields In Sales Order

    There are two exchange rate fields in the sales order, one in Header --> Sales view and the other in Header -->
    Accounting view. 
    What is the difference between the two?  System is display different values in these two fields . 
    ---
    In Header Sales View the exchange rate is used for price Determination.

    Exchange Rate for Price Determination


    The exchange rate that applies to the sales document and that the system uses to convert:
    - Local currency prices (conditions) into document currency.
    - Document currency amounts into local currency, whenever the document values are required in local
    currency.
    And Exchange rate in Accounting View is  For FI Postings

    Exchange rate for FI postings


    The exchange rate that the system applies when you create an invoice.
    Your system is configured in such a way that it expects:
    - No prefix (leading sign) for direct rates
    - A "/" as prefix for indirect rates (t-code OB08 - Column Indirect Quoted Exchange Rate)
    Double click the item condition to see the actual Exchange in the Sales Order Item.

    Document currency is the currency appearing at the header of the document under "Pricing and Statistics " tab. The
    field label is "Doc Currency". Hence there is no mistaking it. It can flow from the customer master , or can be
    manually entered in the sales order.
    Condition record currency is the currency one enters at the line item level.

    System will always convert the item level value into document currency value. For instance, if the line item amount
    is 100 USD and doc currency is INR, then condition value will be 4000 INR, if the exchange rate is 40 INR / USD.
    Also please note that net value of the line item and sales document will always be in document currency.

    document currency:

    The currency in which a document is posted.

    In SD point of view:

    A currency in which the total values in a sales and distribution document are calculated.

    Local Currency:

    Amount in the local currency of the company code.

    Each comp code is assigned with a currency. Eg: In India, it will be INR and in USA its USD etc.

    Its not mandatory for a foreign customer to pay in our local currency. He pays in his country's currency and its been
    converted according Exchange Rates to INR, then that INR amount is stored in LOCAL CURRENCY and the
    original amount he payed(without appliying exchange rate) is stored in DOCUMENT CURRENCY.

    One way to take care of this even though VK11 created with different currency is

    in V/06 for condition type detail, in control data2 choose Currency conv.

    which will take care of converson from condition recrod to Document currency below is the help detail FYR

    Indicator: Currency Translation after Multiplication

    Controls the currency conversion where the currency in the condition record varies with the document
    currency.

    Use

    To calculate a condition value in a document, the system multiplies the amount that results from the
    condition record by the item quantity. This indicator controls whether the system carries out currency
    conversion before or after the multiplication takes place.

    Procedure

    If you mark the field, the system converts the condition value into the document currency after
    multiplication. If you leave the field blank, the system converts the condition value into the document
    currency before multiplication.

    2. Check currency have you maintained in your Sold Party customer master record .

    3. Sold To Party currency will flows into Sales document then here ( Sales document ) you can change that
    currency also .

    4. Defaulted currency is Company Code currency .We can maintain exchange rates in OB08 .
    Local & Global Currency
    We all know that we can create Invoice in any currency, but the posting in Finance happens only in Company Code
    Currency.

    Now let take example of Company like Domino’s Pizza. It is listed in India & also has a Head Office in US or some
    other country. This means that it has to sumbit Balance Sheet in INR in India & in USD in United States.

    Also take example of Accenture. It’s Registered Office is in Ireland, Head Office is in US & it also has a Indian
    Subsidiary. This means it has to report in INR in India, in USD in US & in EUR in Ireland.

    How to handle situation like this when the posting in SAP in Finance happens only in Company Code’s Currency,
    which in above case would be INR.

    SAP has introduced facility of Local & Global Currency for this purpose. For each Company Code we can define 1
    Local Currency + 2 Global Currency in the IMG link below:

    IMG – Financial Accounting (New) – Financial Accounting Global Settings (New) – Ledgers – Ledger – Define
    Currencies of Leading Ledger

    Here for each Company Code you can define a Local Currency & 2 Additional Local Currencies i.e. Global
    Currency. You can also specify Exchange Rate for these Global Currencies.

    Now, this means that every time a Financial Document is posted, system will generate values in three currency: 1
    Local Currency + 2 Global Currency.

    This also means that whenever a Sales Invoice is posted to Accounts, system will post the value in 3 different
    currency.
    The following fields are updated in BSEG Table:

    BSEG – DBMTR – Amount in Local Currency

    BSEG – DMBE2 – Amount in 2nd Local Currency

    BSEG – DMBE3 – Amount in 3rd Local Currency.

    Thus in the below Accounting Document of Sales Invoice, you have option of displaying the Figures in Local, Document &
    Global Currency.

    Also the Global Currency is different than Invoice Currency. Invoice currency may be Australian Dollars but the posting
    will happen in Local Currency (say INR) + Global Currency (say USD + EUR) .

    Disclaimer: The names of Companies used above are only for example purpose & I don’t know anything about their legal
    status.

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