FAGL_FC_TRANS for Fixed Assets

[Former Member]

SAP experts,

We are doing FC Valuation and translation for a foreign subsidiaries to report US GAAP . ( FAGL_FC_VAL for FC valuation followed by FAGL_FC_TRANS for Translating the group currency with spot/avg raye for BS and PL respectively). Confiured BS adjustment account for translation and the translation difference posted at Month end ( BS adjustment acccount) at month end and reverse it on 1st day of next period. No update on individual accounts.

The FASB docs explains that FASB amount is to strip off the EX rate influence on the BS numbers of Foreign subsidiaries. ( Group currency amount of Foreign Subsidiary in SAP)

Gone thru SDN and came to know the treatment to be given to Fixed assets. Looks like it need not be valuated as it sits on Balance sheet long time. It is not clear . In simple terms do we have to include Fixed assets and accumilated depreciation in FAGL_FC_TRANS or not?

Answer is yes for Translation the what rate . How do I derive the correct historical rate as the assets are carried over a long period when we do not update the assets Group currency amount.

Do we do the translation for all P&L accounts also?

Appreciate early replies.

Regards

[Former Member]

You need to translate every Balance Sheet and P&L GL account other than equity. The reason why you exclude equity is because you post the translation difference to accumulated other comprehensive income that is included in the equity section.

You had a question on valuation of fixed assets. Now valuation and translation are two different things. Valuation is from document currency to local currency. Translation is from local currency to group currency. Valuation is performed only for open item accounts and foreign currency balance sheet accounts. I don't know of any other exclusion criteria for valuations.

[Former Member]

Thanks for your instant reply.

Yes I am wrong in using the term valuation instead of translation. Translation is nothing but re-measuring/translating the Group currency Balance sheet .

Understood from your reply that all accounts except Equity are to be remeasured/Translated .

So In FAGL_FC_TRANS we have to run

1. For all BS accounts using Spot rate.

2. For Fixed assets account different rate

3. For PL balances separately after ticking the P&L accounts

4. Do we have to check (tick mark) the u2018valuate period balance only u2018 on the screen for PL?

Is the fixed assets GL accounts are to be treated in a different way unlike other BS accounts ? The Fixed assets are to be re measured with different ex rate ie Historical rate ? How do I get historical rate? What steps to be followed to complete the FASB52 and how to reconcile with manual .

Regards

Madhavi.

[Former Member]

Please see my responses below.

1. For all BS accounts using Spot rate - yes, the rate on the last day of the month.

2. For Fixed assets account different rate - same rate applied to all balance sheet accounts

3. For PL balances separately after ticking the P&L accounts - yes, but this is at the average rate for the month

4. Do we have to check (tick mark) the u2018valuate period balance only u2018 on the screen for PL? YES

Is the fixed assets GL accounts are to be treated in a different way unlike other BS accounts? - I don't see any reason why they should be handled differently.

The Fixed assets are to be re measured with different ex rate ie Historical rate? - No. It is the equity that you want to keep at historical rate.

How do I get historical rate? - The historical rate is on the individual postings on the account. You don't need to get the historical rate from anywhere, as you just leave the historical rate on equity account postings, by excluding these accounts from the selection screen of your Balance Sheet translation variant.

Make sure that for BS translation, you also reverse the translation program entries on the first day of next month. You don't need to do this for PL translation, as you are translating period balance only.

What steps to be followed to complete the FASB52 and how to reconcile with manual. - All of the above conform with FAS 52 rule. What do you have in your manual record? I would eliminate the need for any reconciliation once you are in SAP. A spot check in your testing cycles should do!