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accounting entries in FI- foreign exchange SPOT transactions in TR

Former Member
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Hi Friends,

I want to know what accounting entries will be posted in spot transaction for eg. sell EUR 500 with the local currency being USD. Buy $100. Do I have to buy and sell together in TX.1. Then is any Gain /loss acct hit.

I am checking in sap help for Foreign Exchange - TR, but no notes in detail seen there. Pl provide me with study material links on the same. Also if you can explain me the account determination. it will be good.

Though its basic, its required for my better understanding.

Thanks

kamala

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi,

FX1000+ (Buy FX) will be Dr Bank Clearing Cr Position (Liabilities)

FX2000- (Sell FX) will be reverse of the above

They are both posted thru TBB1 for same FX spot transaction created thru TX01/FTR_CREATE.

Realized gain/loss is posted thru derived business transaction: TPM18

Manish

Former Member
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Hi

Hope u can help me further. For buying for eg.

1 ) What is position -liabilities. What account is posted here. Is it a vendor.

2) Pl give me example on the derived business transaction to post gain / loss.

Thanks

kamala

Edited by: Kamala Surianarayanan on Nov 10, 2009 3:30 AM

Former Member
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Hi Kamala,

Position account will be a balance sheet account reflecting your FX position. It won't be a vendor account (there is no vendor involved here).

For realized gain, entry will be Dr Position Cr P&L account; for realized loss; reverse of the above. This P&L account will be FX Gain/Loss account.

Manish

Former Member
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Hi Manish,

Thanks for your reply.Just want to know,whether the accounting entries for Forward deal will also be same.

Thanks again,

Mridul

Former Member
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Hi Mridul,

Yes, they would be the same.

Of course, for forward contracts, additionally, you have to do month end valuation for unrealized gain/loss.

Manish

Former Member
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Hi

IIn the BUY - the CR is to a position (liabilities )............you have said this in the first comment. In SELL the DR is to a position ( asset ).

I want to know the specific account name in both case.

2) I buy and sell , so how is the commission on the transaction accounted.

Thanks

kamala

Former Member
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Hi Kamala,

In my system, thet account is called FX-GL Corporate; but you could call it whatever. Essentially, it is a balance sheet GL account reflecting your FX position.

For commissions, you can create a flow, and add it in "Other Flows" tab in the transaction and specify either an amount or a percentage.

Manish

Former Member
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Hi

Thanks for continued response.

1) For BUY (usd. 100.....operating currency),

Bank Clrg To FX $ 100

2) For SELL ( eur .94..........sell to customer) ......rate : 1 $ = 0.94 Eur

FX To Bank Clrt $ 100

MY QUESTIONs :

-


1) When I do the spot transaction, I am selling to a customer, then shouldn't I DEBIT a customer . So do I set a FI customer in BP master.

2) The B/ S account eg. FX..........is it similar to a normal bank account, to know the amount of balance in USD

Thanks

kamala

Former Member
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Hi Kamala,

I see where the confusion might be.

You enter into a TR transaction not with a customer or vendor but with a bank like JP Morgan, Citibank etc.; which is your counterparty for that transaction.

The balance sheet FX account is not a bank account but it ia an account which reflects your Foreign exchange position.

Manish

Former Member
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Hi

ok..........the B/s account is clear. I get to know the forex traded.

Hope I can continue with my issues one as below :

On the transfer posting to FI, the customer account has to be credited for the EUR sold. So how is this setting done in the configuration of 'Acct Determination'. I mean in the Symbol and GL account area.

Do I have to put the bank data of customer in the FI customer role in BP master.

Thanks

kamala

Former Member
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Hi Kamala,

There is no customer in an FX transaction.. the company enters into a FX transaction with a bank (trading partner/counterparty). So, there is no customer account to be credited.

The accounting entries for FX1000+ and FX2000- will be as per the earlier post.

Now, to actually send money to the bank; you can either do a wire thru SAP or outside of SAP. To do it from SAP, you can configure payment request/F111 and enter counterparty bank details in the BP master data "Payment transactions" tab.

Manish

Former Member
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Hi Manish,

I am not clear with ' no customer ' part. Pl let me know if below process is ok for scenario like a customer approaches the company and wants to buy eur currency . The rate is 1 $ = 0.94 EUR

1) Customer pays the company $ 100 ...........ie i buy $ 100

2) I inturn give the customer the EUR 94.

3) I transfer the transaction to FI.

4) I can pay the customer using F110 only if the customer account is credited.

Your note says there is no customer. Then how can we call it sale to customer.

Thanks

kamala

Former Member
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Hi,

So, your company is entering into a FX spot/forward transaction with a counterparty other than a bank. That counterparty would need to be created as a business partner in SAP. That conterparty will not be a customer.

Accounting entries will be as previously posted.

This is not a sale to a customer but a FX transaction with a business partner/ counterparty.

Manish

Former Member
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Hi Manish,

I have assigned role TR0151 and the transaction gets posted. But in transfer process to FI, I need to know the account determination to be done. viz the GL to be assined eg. symbol 1, with valuation area 001. I think there will be multiple lines therein. Pl guide on the selection parameter to post to FI.

Thanks

kamala

Former Member
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Hi,

FX1000+ has posting specs 11200 (Dr 3 Cr 1 A/c symbols)

FX2000- has posting specs 11100 (Dr 1 Cr 3 A/c symbols)

1 and 3 a/c symbols are mapped to accounts as discussed earlier.

Have you done config for a/c assignment ref. determination.. you could use something simple based on product type, transaction type, etc.

Manish

Former Member
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Hi Kamala,

As far as Treasury is considered Business partner is the last person with whom you settle your contract. So essentially when you create a forex transaction you settle it with your business partner.

In your case, when you sell EUR it is reducing your position which is a balance sheet account. Hence credit forex position account and debit your bank clearing account. But since you are selling it to the customer, you can directly debit your customer in this case and credit your position. Now it will be raised as an invoice for the customer. Then it will be open in FI against this customer.

Similarly for the buy USD case, you can directly credit the customer and debit your forex position account. This will be created as credit memo.

Regards,

Ravi

Edited by: Ravishankar Ramamurthy on Nov 12, 2009 8:14 AM

Former Member
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Hi Manish,

Thanks for the detailed note.

This is my first had at account determination. Did not get good help in sap help . Hence the multiple questions.

My questions are answered with your good help.

Thanks

kamala

Edited by: Kamala Surianarayanan on Nov 12, 2009 8:33 PM

Former Member
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Hi Ravi,

Thanks for the detailed explanatory notes. The concepts in spot transactions are more clear now.

kamala

Answers (0)