Organizations can have business transactions in multiple counties where the currency is differing from local country. It is a common exercise to conduct transactions in other countries for organizations which is referred to as Foreign Currency Transaction.

If the Document is posted, the local currency amount is derived by using currency exchange rate existing at the time of document posting.

Exchange rate might change the amount in local currency derived using exchange rate at the time of reporting will not be same as local currency amount in posted document. Impact of exchange rate changes needs to be considered by posting adjustment entries.

Define Foreign Currency Valuation: -

Below process is to assign Foreign currency valuation TCVM (Test Foreign Currency Valuation Method).

Step-1: Enter the transaction code OB59 in the SAP command field and click Enter to continue.

(OR)

Enter the transaction code SPRO in the SAP command field and click Enter to continue.

Click on SAP Reference IMG.

Expand SAP Customizing Implementation Guide → Financial Accounting → General Ledger Accounting → Business Transactions → Closing → Valuate → Foreign Currency Valuation → Define Valuation Methods. Click on Execute.

Step-2: In the next screen, select activity New Entries on the application bar.

Step-3: In the next screen, enter the below details.

• Valuation Method – Specify the valuation method name (4-digit alphanumeric).
• Description – Specify the valuation method description.
• Valuation Procedure – Select appropriate options.
• Exchange Rate Determination – Select appropriate options.

Step-4: Once all the details entered, click on the Save button to save the changes.

Step-5: It prompt for the Change Request. Create/Select the change request and Click on right mark to proceed.

Step-6: Status bar displays the below message once the accounts defined saved successfully.

Technical Information: -

• Transaction Code: - OB59
• Navigation path: - SPRO → SAP Reference IMG → SAP Customizing Implementation Guide → Financial Accounting → General Ledger Accounting → Business Transactions → Closing → Valuate → Foreign Currency Valuation → Define Valuation Methods