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Difference b/w group currency and global currency

Hi All

What is the difference b/w group currency and global currency? some body explain me a briefly?

Regards,

Naren

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  • author's profile photo Former Member
    Former Member
    Posted on Jan 05, 2008 at 12:34 PM

    I dont understand what you mean by global currency. However I may be in a position to explain group currency.

    Group currency is used to consolidate your financials, if your group has companies located across the globe transaction in multiple currencies. For example you have companies in US, Eurpe and in APAC transacting in multiple currecnies. At the end of the day, the group would like to see the financials at a common currency for viewing the result and filing with the statutory authorities. This common currecny is called group currency. You translate all your transactions from the local currency to group currency. This is normally achieved in real time in SAP if you have maintained the setting.

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  • Posted on Jan 05, 2008 at 01:35 PM

    In the above reply, Sivakumar has mentioned about Group Currency in SAP.

    I would like to add the following:

    Global currency refers to a currency in which the vast majority of international transactions take place and which serves as the world's primary reserve currency. Global Currency is an economics terminology.

    SAP does not use Global Currency concept. However there is provision to use 'Hard Currency'. Using Hard currency for the transactions have to be decided by the User companies. Hard currency or Strong Currency, in economics, refers to a currency in which investors have confidence, such as that of a politically stable country with low inflation and consistent monetary and fiscal policies, and one that if anything is tending to appreciate against other currencies on a trade-weighted basis.

    Group Currency is not an economics terminology. It is an accounting terminolgy.

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