FOREIGN CURRENCY BALANCES REVALUATION ( FC Balance Revaluation) IN SAP FICO, CUSTOMIZATION STEPS

 FOREIGN CURRENCY BALANCES REVALUATION ( FC Balance Revaluation) :

Consider we have taken SBI FC Term Loan on 31.07.09 of 100000 US$ which is equal to 48,00,000 INR @ 48/ US$. Consider that Company has not paid the loan upto 31.03.2010. As per Accounting Standard 11, US GAAP, IFRS it is mandatory to revaluate the  FC Loan Balance as on 31.03.2010.  Revaluation of FC Balances is applicable to  all FC Loans/ Export  Vendors/Import Customers Balances except for Advances. If on 31.03.2010 rate of 1 US$ equals INR 50, Difference of INR 500000 ( 100000 US$ x 5 Rs. == 500000). This difference should be transferred to Exchange Loss and charged to P& L Account.

Customization of FC Balance Revaluation:

Step.1 Creation of 3 GL Masters

Account Name                                       Under Group                          No. Range

A) SBI FC Term Loan A/c                     Secured Loans                   100300 to 100399

B) Exchange Gain  A/c                          Other Income                     300100 to 300199

C) Exchange Loss A/c                           Administration                   400300 to 400399

1st A/c

GL A/c#  100301               Comp.Code: PSL     F.Year:                2009

Select With Template Button

GL A/c#                               100300

Comp.Code:                      PSL                        Press Enter

Change Short Text & Long Text  to SBI FC Term Loan

Select        Control Data Tab

Change Account Currency to USD

De select in Only Blances in Local Currency Check Box

Select        Create/Bank/Interest                        Tab

Remove Interest Indicators and Dates                  →  SAVE

2nd A/c

GL A/c#  300100               Comp.Code: PSL     F.Year:                2009

Select With Template Button

GL A/c#                               400300

Comp.Code:                      PSL                        Press Enter

Step 3.                            Select        Type/ Description           Tab

Change Account Group  to Other Income

Change Short Text & Long Text  to Exchange Gain →   SAVE

3rd A/c

GL A/c# 400301        Comp.Code: PSL         F.Year:   2009

Select With Template Button

GL A/c#                               400300

Comp.Code:                      PSL                        Press Enter

Change Short Text & Long Text  to Exchange Loss         →   SAVE

Step 2. Define Accounting Principles:

SPRO---->Financial Accounting ( New)---->Financial A/c Global Settings(New)---> Ledgers--->Parallel Accounting--->Define Accounting Principles

Select New Entries Button

A/c Principle                P1                (Text field any thing can enter)

Name / Descriptionof A/c Principle:                   Indian Accounting Standards

SAVE and Press Enter to save in your request.

Step 3. Assaign Accounting Principles to Ledger Groups:

Same Path ( Next Level to last path)

Select New Enteries Button

A/c Principle :                                 P1

Target:                                            Ledger Group

Select OL for Indian Accounting Standards        

( By default all Indian Companies SAVE and Press Enter to save in your request. IAS is defined by SAP)

Step 4. Define Valuation Methods:

SPRO---->Financial Accounting(New)---->GL A/c ( New)---->Periodic Processing----> valuate--->Define Valuating Methods

Select New Entries Button

Valuation Method     PSL1               (Text Field)

Description               FC Valuation for PSL (Bank Selling Method)

Select  Always Evaluate Radio Button

Document Type           SA

Ex Rate type for Dr. Balance                            B       (Bank Selling Rate)

Ex Rate type for Cr. Balance                             B       (Bank Selling Rate)

select Determine Exchange Rate Type for A/c Balance  Radio Button

→    SAVE                    →     Enter to save in your request.

Step 5. Define Valuation Areas:

Same Path ( Next Line to Old path)

Select New Entries Button

Valuation Area :           PA               ( Text Filed)

Valuation Method:        PSL1

Currency type :            Select Company Code Currency →   SAVE

→    Enter to save in your request.

Step 6. Assaign Valuation Areas & Accounting Principles :

Same Path ( Next Line to Old path)

Select New Entries Button

Valuation Area :           PA

A/c Principles:             P1                      →    SAVE

→    Enter to save in your request.

Step 7.  Prepare Automatic Posting for Foreign Currency Valuation:

SPRO---->Financial Accounting(New)---->GL A/c ( New)---->Periodic Processing

-----> valuate--->FC Valuation----> Prepare Automatic Posting for Foreign Currency Valuation

( TC=OBA1)

Double Click on Exchange Rate Difference UG Exchange Rate Key

Chart of Accounts :      PSL

Select Right Arrow at Down and Change Valuation Area Button

Valuation Area             PA                      →    ENTER

Ex.Rate                     Expense A/c                  Exchange

Diff. Key                    (Exchange Loss)            Rate GainA/c

USD ( Text Field)              400301                          300100                  →     SAVE

→    Enter to save in your request.

Step 8. Assaign Exchange Rate Difference Key in Loan A/c ( FS00)

GL A/c :                               100301

Comp. Code :              PSL

From Menu----> GL Account----> Change

Select        Control Data Tab

Exchange Rate

Difference Key

USD                                   →     SAVE

END USER AREA FOR FC REVALUATION :

{1}            FC Term loan Receipt ( F-02)

Doc.Date:  01.08.09      Comp. Code:  PSL                 Currency : USD

Post.DT:    01.08.09       Type :  SA                               Rate: 45.00

Post Key:               40  A/c #                 200100                  →     Enter

Ignore Warning Message                        →    Enter

Amount :          100000 USD                                       Buss.Area: PSLH

Text: SBI FC Term Loan Receipt                          →  Enter

Post Key:               50  A/c #                 100301                  →     Enter

Amount :     *               USD                                       Buss.Area: PSLH

Text: +              →    Menu----> Document ---->Simulate and SAVE

{2}            Enter Year End Exchange Rates in Forex Table ( OB08)

Select New Entries Button

Ex. Rate Type	Valid From	From Currency	Direct Quot	To Currency
G( Bank Buying Rate) B( Bank Selling  Rate)	31.03.10 31.03.10	USD USD	49.50 50.00	INR INR

                            ↓

SAVE

{3}            FC Valuation:

Accounting ----> Financial Accounting---->Gen Ledger---->Periodic Processing---->

Closing--->Valuate---> FC Valuation(New)                    ( TC=FAGL_FC_VAL)

Comp. Code:               PSL

Valuation Period:         31.03.10

Valuation Area:            PA

Select        GL Balance                    tab

Select Valuate GL A/c Balance Check Box                          →     Execute ( F8)

Select on Postings Button and Select Back Arrow 2 Times

There are 2 types of FC Valuations.

1) Month End Valuation

2) Year End Valuation

If we made Month End Valuation, Exchange Gain / Loss will be double unless
we reverse in next month. So We will reverse the Exchange Gain/ Loss under
Month End Valuation until the Year End. There will be no Reversal on Year End.

Procedure for Month End Valuation:

Step 1. Month End Exchange Rates in Forex Table ( OB08)

Enter Month End Exchange Rates then go to FC Valuation Screen

IN FAGL_FC_Val Screen

Comp. Code: PSL       Valuation Key Date: 31.08.09 ( Every Month End)

Valuation Area: PA

Select        Create Posting Check Box

Post.Date: 31.08.09                        Reverse Posting Date:             01.09.09

select Reverse Posting check Box Select GL Balance Tab

Select valuate GL A/c Balance  Check Box

GL A/c:            100301         →     Select Execute Button ( F8)

Procedure for Year  End Valuation:

Step 1. Year End Exchange Rates in Forex Table ( OB08)

Year End Exchange Rates then go to FC Valuation Screen

IN FAGL_FC_Val Screen

Comp. Code: PSL       Valuation Key Date: 31.03.10 (F.Y.End Date)

Valuation Area: PA

Select        Create Posting Check Box

Post.Date: 31.03.10                        Reverse Posting Date:             Blank

De select Reverse Posting check Box Select GL Balance Tab

Select valuate GL A/c Balance  Check Box

GL A/c:            100301         →     Select Execute Button ( F8)

From Menu--->System---->BatchInput----> Sessions

Session :   PSL                   →     Click on Process Button ( F8)

Select Display Errors only  Radio Button

Select Process Button                           →    Enter

Business Area:            PSLH                  →    Enter

Again       Business Area:            PSLH                  →    Enter

We will get a message that Processing of Batch Input Session is Completed

Select Exit Batch Input Button

To View the Document Posted ( TC=FB03)                         →     Enter

Double Click on 1st Line Item

We can see the FC Revaluation Document Posted.