SAP Financial and Currencies

SAP Financial and Currencies which shall be used must be identified by a currency code . Many of the world's currencies are already outlined within the SAP R/3-System. Each foreign money code can have a validity date.For every mixture of two currencies, different change rates can be maintained which are distinguished by an trade fee type. These completely different change charges can be used for numerous functions resembling: valuation, translation, conversion, planning, etc.The relation between currencies should be maintained per change fee sort and foreign money pair in the interpretation factors. This usually has to be performed solely once. As a consequence of inflation can dramatically change the relationship between currencies, translation components could be maintained on a time-dependent basis (since 4.0A).

Sustaining exchange rates is an on-going task.To cut back upkeep, R/3 offers several tools. For every change fee sort one of the following tools can be utilized:
  1. Inversion (inversion is the oldest and is seldom used immediately)
  2. Base Currency
  3. Trade Charge Spreads
Simply one among these three instruments can be utilized per trade price; however, for various alternate fee varieties totally different tools could be used.The program RFTBFF00 maintains the exchange fee table routinely by uploading an enter file in multi cash-format.Exchange fee spreads between the financial institution buying/selling price and average price normally stays constant. If the change fee spread of an trade fee kind is entered into the system, solely the common rate must be maintained since the shopping for and the promoting charge can be derived by adding/subtracting the change rate unfold to/from the typical rate.Combination of base currency and alternate charge spreads,A really efficient mixture of the exchange rate instruments is Using a base foreign money for the common charge (M) and Utilizing the trade charge spreads to calculate the shopping for and promoting rates (B and G).

Base Currency

A base forex may be assigned to an trade rate type. It is then only crucial to take care of exchange charges for all different currencies into this base currency. An exchange fee between two international currencies is calculated by combining the two charges between every foreign money and the base currency. A base forex can solely be used for a mean fee (e.g. M), not for a selling or shopping for rate.Until 4.0A it was solely attainable to use one base currency per trade price type. Authorized necessities could make it mandatory to make use of totally different base currencies for the change charges with completely different currencies.

Example: The base currency of the group is USD. One firm code of the group lies in Mexico.In Mexico it's a legal requirement that each one company codes have to use the local foreign money MXN as the base currency.To all currency pairs with MXN of the traditional change price sort a derived exchange price sort gets assigned which has the bottom currency MXN. Normally the base foreign money USD is used; nonetheless, for all alternate rates with the forex MXN, the bottom forex MXN is used.


Firstly of the currency union, the bottom foreign money has to be switched to EURO. This can be
accomplished by defining a new alternate rate kind with the bottom forex EURO valid from the day of the starting of the European Monetary Union (EMU). This new exchange rate type then must be entered because the derived change charge sort of the previous trade charge type. Special translation rules for the EMU should be followed, e.g. rounding rules. For each alternate price kind you'll have the option to select whether these regulations needs to be followed or not. The change rates of an alternate price kind might be “fastened,” i.e. the system checks whether the manually entered change charge varies from the mounted exchange rate.

All R/3 functions and features process exchange charges using the direct citation as well as the indirect quotation. Whether the change charge is defined or communicated utilizing the direct or oblique technique of quotation relies upon in the marketplace customary or the individual enterprise transaction. The use of indirect quotation is neither application nor nation-specific - it impacts all of the parts in which exchange charges are used.The direct citation is often known as the worth notation: The forex worth is expressed in the native forex per unit of overseas currency. The indirect quotation is also known as the volume notation: The forex worth is expressed in items of the foreign forex per unit of the native currency.

For each currency pair you may outline both the direct quotation or the indirect quotation as the
normal notation for the alternate rate. If the alternate rate you enter does not have the identical
quotation as the usual quotation set up here, the exchange fee is highlighted to indicate this.

Design of Exchange Rates

Exchange rates might be entered as a direct or indirect quotation. You may preserve two prefixes that can be used to distinguish between direct and oblique quotations exchange rates throughout input and display. In the occasion you don´t arrange a prefix, the usual setting is legitimate:
. “” (blank, with out a prefix) for direct quotation alternate rates
. “/” for indirect citation alternate rates

Situation 1: In case you use primarily direct citation trade charges and oblique quotation happens seldom,use the default configuration. On this approach you probably can enter direct quotation trade charges with no prefix.
State of affairs 2: If, in addition to direct quotation change charges, the handling of oblique citation is required, you should define a prefix that's not “clean” for each quotation sorts, e.g.: . “*” for direct citation trade charges, “/” for indirect citation change charges .When you observe this suggestion, the configuration doesn't enable change charges to be entered without a prefix, an error message occurs. Thus users are pressured to contemplate which the right quotation is and enter the speed with a sound prefix.
Scenario three: If oblique quotation is the foremost notation at your company, you possibly can configure the settings this fashion:
  1. “*” for direct citation alternate charges, “ ” (blank) for indirect quotation alternate charges
  2. This configuration allows indirect citation exchange charges to be entered with out a prefix whereas the much less used direct citation trade charges should be entered with a prefix.
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