SAP Clearing in Local Currency

SAP Clearing in Local Currency

Transaction OBY6

 

Effect of clearing in Local currency : Purchase USD 1000 at 1 USD = 2 SGD.


The accounting entry in Local Currency is
Purchase account Dr 2000
Vendor account CR 2000

Paid when the exchange rate is 1 USD = 1.8 SGD.
In this case, the party is supposed to pay local currency equivalent to Foreign Currency and in this case will be 1800 SGD.

When he pays SGD 1800,
the following accounting entries area passed :-
Vendor account DR 2000
Bank account CR 1800
Gain on Foreign Currency fluctuation CR 200

At the time of clearing, the system expects the amount to be at the present exchange rates and the difference is posted to the Foreign Currency rate differences account.


If this differences are not required or the payment in clearing local currency is expected to be paid at the exchange rates prevailing at the time of sale/purchase transaction took place, then there is a facility in company code Global settings screen to elimate the differences.

In this case and in the above example the receipt would be SGD 2000.
The differences are not recorded.

To set the clearing in local currency :-

OBY6 – Company code Global data
Double click your Company code
Tick the no ex. rate diff. when clearing in loc. curr

Also See: SAP Currency Exchange Rates Table (OB08)

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