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Functional currency

Hi,

I have a question regarding whether functional currency = company code currency or not.

Our group reporting and management reporting currency is USD.

we are going to implement many countries.

We have scenario = Functional currency = USD, statutory/VAT/WHT = USD.

We have scenario = Functional currency = Other currency, statutory/VAT/WHT = other currency

However we have another scenario company location in PH, although functional currency is USD but the statutory reporting currency = USD but VAT/WHT = PHP.

As normally we will follow functional currency = company code currency (leading ledger).

As we might know, for defining different currency in VAT report we can activate via General Ledger Account > Business Transaction > Closing > Report > Sales / Purchase Tax Returns > Activate Alternative Local Currency for Advance Tax Return but it is cross client setting. If set up, it will affect other company code.

For WHT it is only using translate date using exchange rate but not at transaction document level.

Should i still implement company code currency as PHP (due to limitation in VAT/WHT) or should i just company code=functional - USD only customise VAT/WHT in the country context, (i have to consider other countries requirement as well)?

Appreciate some advice. Thanks.

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2 Answers

  • Posted on Jul 26, 2016 at 03:36 PM

    Hello,

    In case of greenfield implementation, I would suggest following scenario:

    • Set USD as group currency and CO currency to currency type 30 (group currency USD)
    • Use local currency as first local currency so your VAT and WHT reporting is correct out of the box
    • Activate group currency (type 30 USD) as second local currency for all your company codes so you will get your global reporting in FI and CO in USD at historical exchange.

    Good luck

    Th.

    PS: one tip if you have to report WHT in second local currency: table WITH_ITEM contain the required data.

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  • author's profile photo Former Member
    Former Member
    Posted on Jul 26, 2016 at 03:00 PM

    I would say that yes, company code currency should be the same as functional currency unless you have very strong reasons to do otherwise and thought through all the possible implications and there is no other way. You will have to really think through the way you will do currency re-valuations.

    This thread might be helpful, it discusses a scenario similar to yours.

    >https://scn.sap.com/thread/3689307

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