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Chapter 19 ■ Customizing New General Ledger Accounting
In this exercise, we will be looking at the closing processes involved in foreign currency valuation,
balance carried forward, and reclassifying of GR/IR. We will not be looking at open and closing posting
periods and the creation of financial statements, because that was already covered in Chapters 12 and 13.
During year-end closing operations, new posting periods are opened and balances from the previous
year are carried forward into the new fiscal year. Once balances are carried forward, you can then prepare
and generate several reports (including financial statements for the period) and archive documents online
that are no longer needed.
Foreign Currency Valuation
At month’s end, foreign currency valuation is usually carried out. This operation is important as it valuates
all transactions in the period posted in foreign currency. When performing monthly foreign currency
valuation, an exchange rate is entered for the month’s end.
In order to generate financial statements , closing operations for foreign currency valuation have to be
performed. For accounts run in foreign currency, you have to prepare and create the following items:
• Foreign currency balance sheet accounts for the G/L accounts that are valuated in
foreign currency
• Open items in foreign currency open at a key date
The system also allows you to perform the following optional activities:
• Currency valuation per company code (local currency valuation)
• Currency valuation per group currency (parallel currency valuation)
• Use valuation procedure (for example, lowest value principle, strict lowest value
principle, always valuate, and so on).
■■Note
when financial statements are required on a monthly basis, you must generate foreign currency
valuation for open items for G/L accounts and vendor/customer accounts.
It is advisable that each valuation be run individually, since valuations are posted as batch input sessions.
For example, separate batch input sessions are generated for G/L accounts and vendor/customer open items.
Problem: Post some invoices for accounts receivable and accounts payable with foreign
currency (for example, in USD or EUR).
To execute foreign currency valuation, follow this menu path: Accounting ➤ Financial Accounting ➤
General Ledger ➤ Periodic Processing ➤ Closing ➤ Valuate ➤ Foreign Currency Valuation (New). Or use
transaction code FAGL_FC_VAL. The Foreign Currency Valuation screen (Figure 19-28) is displayed.
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