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Former Member

Exchange Rate Differences function and when to use

The company I am asking about is based in the US, but also has offices and transactions in Canada. Does the Exchange Rate Differences function need to be run at month-end before finalizing the financials, in order to "re-value" the Canadian accounts, such as Accts Receivable, Accts Payable, Fixed Assets, etc. that may not have changed during the last month (no activity during the "current" month)? The financials are expressed in US Currency. Transactions during the month to the various Canadian accounts are "re-valued" at the time of the transaction entry, since the exchange rates are updated every day in the system. We need a clear-cut idea of when the Exchange Rate Differences function should be run.

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    Former Member
    Aug 17, 2007 at 05:57 PM

    No, you don't have too. If your system currency by Default is USD, it will store the CAD value as Foreign Currency. You can constantly have both value in USD and CAD. When generating your reports you can force the use of a currency with the properties. So all your reports can have CAD values in USD. No need to convert yourself, SAP does it for you without having to ask.

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    • Former Member

      I would say that you do need to do it. This is very important to ensure your account receivable control account (or payable) is revalued at the end of the month based on the new exchange rate.

      I know some companies do not revalue the balances as it is not required. I think, revaluating the balance makes sense as it will give you a true picture of your payable or receivable at the end of the month. This is also a good way of accruing your exchange rate loss/gain.

      Vincent