Fi foreign currency valuation: valuation area

[former_member654515]

Hello,

I don't understand the valuation area as a selection field.

Per this screenshot:

https://erproof.com/wp-content/uploads/2017/06/word-image-392.png

Why is valuation area a *selector* for gl accounts/items? It groups together the *method* and *currency* **to actually revalue**, so it doesn't *select* anything.

Thank you,

[former_member221103]

Hi,

Assignment of valuation method with valuation area transfers the properties in Valuation Area. If different settings are required based on business needs then Valuation methods will be different. But in order to use such settings you need to assign it to Valuation Area. Very Basic example - Business wants to perform valuation based on two different exchange rates types. In this case you need to create two different valuation methods and need to have different valuation areas.

Regards,

Abhinav Malik

[JonathanEemans]

Hi,

Simplified example: in local GAAP only losses are revaluated and in IFRS both losses and gains are revaluated. In this example you have a valuation area for local GAAP that posts in local ledger and one for IFRS that posts in IFRS ledger. When you run the foreign currency valuation, you select for which valuation (local GAAP of IFRS) you execute the foreign currency valuation.

Best regards,

Jonathan Eemans

[former_member410658]

Hello Jonathan,

Your example is very concrete, I assume we are in the context of open items valuation.

If you process two times the Foreign Currency valuation, with different valuation areas connected to different accounting principles/ledger, the pivot account defined in the customizing cannot be set up with Open item management, right ?

My understanding is that you cannot use a GL Open Item if you want to post to a specific ledger group.

Best regards,

François