SAP S4HANA Demo: Foreign Currency Valuation

- Meaning of FOREX Valuation
- Realized vs Unrealized Foreign Currency differences
- S4HANA Demo
This is a part of the "SAP S4HANA 1709 Training Series", in the link below
goo.gl/Nhj6FW
Don't be shy to ask any questions!
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[@cringebee-vt1nk]

Thank you so much sir... I was struggling with the concept....but u made it easy.....God bless u

[@bharatpatidar3522]

Thank you so much for such a easy way to understand forex transaction. I'm learning a lot watching your videos about different GL postings. Thanks again and keep uploading such training videos for us.

[@AbdullahGalal]

My pleasure!

[@bentaamalia2267]

Perfect explanation! Thank you for sharing this with all of us!

[@AbdullahGalal]

My pleasure!

[@aliad.4848]

SUPER explained including AMAZING logic. Very helpful! Many thanks!

[@AbdullahGalal]

Very welcome

[@diplodiplo8872]

I have been watching Hana tutorials for sometime. Never seen one with such good quality. Clear explanations, superb video and audio . It obvious that you have invested a lot of time on this. In short thanks and keep it coming.

[@AbdullahGalal]

Thank you so much! they do take a lot of effort and time, and i enjoy every second of it :)

[@Ahmed-fq6si]

I confirm 🙏

[@mohammedasif415]

Wow that's great very clear cut explanation, Masha Allah.. Allah make you success in all your efforts.👍

[@AbdullahGalal]

Thanks a lot, Amin

[@bullxcx6991]

Thank you so much for the spot on explanation! I could understand the relation now thanks!

[@mohammadyousef1604]

Thanks Abdullah for taking the time and effort and sharing this quality content.

[@AbdullahGalal]

My pleasure!

[@sylwiazimnicka6288]

I just need to say: Big thank you! Great teaching skills

[@AbdullahGalal]

You're very welcome! very appreciated

[@ajinkyamohadkar9989]

Thank you Abdullah. It was really helpful to understand conceptually about Foreign Currency Valuation

[@AbdullahGalal]

You're welcome, thank you for your comment

[@rainarahmadani6364]

thank you so much Mr. Abdullah, your video really helpful to understand.

[@AbdullahGalal]

You are welcome Raina, thank you for letting me know, it makes me motivated to make more videos

[@srikanthnc7804]

Thank you so much Abdullah for explaining very clearly with examples...

[@AbdullahGalal]

You're most welcome

[@KumR]

I work on Oracle but I still used this explanation. Great One.

[@AbdullahGalal]

Glad to know! thank you

[@kalyanhere070981]

Thank You for your great Effort Mr. Abdullah.

[@AbdullahGalal]

It's my pleasure

[@jogeswararao1953]

Nicely Explained, Appreciating your efforts. Thank You, Abdullah :)

[@AbdullahGalal]

My pleasure

[@celtonfurtado]

Very well explained! Clear and Concise!

[@AbdullahGalal]

Glad it was helpful!

[@evelintheodoridouu8939]

you could not explain it better! Well done :)

[@AbdullahGalal]

Thanks! 😃

[@basureddy6418]

Good work Abdullah! Thanks for easy explanation......

[@AbdullahGalal]

You're welcome!

[@satyas1914]

Excellent explanation!!

[@ghostship14]

*Thank you so much Abdullah!*

[@NaveenCha]

Very clear and crisp explanation on realized and unrealized valuation. Thanks for sharing your knowledge Abdullah.

[@AbdullahGalal]

My pleasure!

[@maheshbabu3368]

@@AbdullahGalal 0000000009

[@faisalalkheraiji8264]

Thanks Abdullah. Clear Explanation !

[@AbdullahGalal]

Glad it helped

[@madandeshpande3961]

Great Abdullah! Very simple approach and clear conceptual explanation.

[@AbdullahGalal]

Glad it was helpful!

[@sandeepdodda2890]

On the date of closing itself with update run is it reversal entry will also be passed or only unrealised/adj entry only be passed?

[@user-ki2kc3mb5s]

Great Explanation i understand so easy ...thank you

[@AbdullahGalal]

You're welcome, thank you for your comment

[@mohammadarmanhossen2691]

Great Effort in FCV. Thanks for creating nice video

[@AbdullahGalal]

Glad you liked it

[@ambasha17]

Easily understood about realized and un-realized. thanks.

[@AbdullahGalal]

You're welcome!

[@shadisayed9161]

Thank You for your great Effort Mr. Abdullah. I hope that you also completing the topics like that with Configurations part then it will be perfect.

[@AbdullahGalal]

Thanks a lot Shady, I just got to 5K subscribers and planning to do a config video as a celebration

[@zeeshankhan-cu8be]

Amazing. Great Explanation.

[@AbdullahGalal]

Thank you Zeeshan, glad to help

[@sumitnair7523]

Thanks a lot . Your explanation is superb.

[@AbdullahGalal]

Thank you, glad I could help

[@sarahamer7093]

Thank you sooooo much جزاك الله خيرا

[@Ton-gm3lf]

You are an excellent teacher! Explaining the WHY before the HOW, and doing it very structured and understandable. So much better than all this indian pointandclick stupid not explaining anything crap. Thank you for your nice video!

[@AbdullahGalal]

You're welcome, I like simplifying topics. To be honest I watch a lot of great Indian SAP Consultants explaining complicated technical topics, they have very good knowledge of the subject that's very useful to experts

[@madandeshpande3961]

Ton...I respect your opinion....But do you know with limited resources Indian for the SAP world are making contributions.. Language or ascent can be a problem for you but not their dedication....On the top they don't charge...so will you please appreciate atleast their efforts...

[@razamushahid]

Hi abdullah.i have never seen such a brilliant explanation in all of your videos and the best thing is giving all free.If someone like me interested in getting coaching on some topics in details like topics related to costing in S4HANA SPECIALLY

[@AbdullahGalal]

So nice of you, thank you

[@suchitradas6246]

perfectly explained.. great job👍

[@AbdullahGalal]

Glad you liked it

[@mohamedramadan1361]

Very excellent video. Waiting more videos related to controlling and costing and other fi videos in Arabic and English. many thanks for you

[@AbdullahGalal]

You're welcome, will get to CO eventually :)

[@mahmouddawood9363]

It was really an excellent video Thank you so much

[@AbdullahGalal]

You're very welcome

[@user-dx2jc1lm8n]

Thanks for the explanation its crystal clear

[@AbdullahGalal]

You are welcome!

[@das52]

amazing i was able to solve an issue with this video... gave me better direction on where to look

[@AbdullahGalal]

Glad to hear that! thank you for the great feedback

[@zeyadsherif2111]

very good video Thank you a lot Abdallah barak allah feek

[@AbdullahGalal]

Wa Feed Zeyad, thank you

[@SuperMegamalik]

Thanks Dear Abdullah, very nicely explained, after watching your video I subscribed your channel

[@AbdullahGalal]

My pleasure, thank you for the sub

[@mahmoudgohar1013]

عظمة يا بودي

[@AbdullahGalal]

❤

[@shantanuarekar6617]

very good and precise explanation

[@AbdullahGalal]

Glad you liked it

[@Ahmed-fq6si]

Amazing, whenever I go to SAP documentation I get lost. As if they do it on purpose. They make you think it's rocket science. Thank you Sir. God bless you, everything is crystal clear as usual.

[@AbdullahGalal]

Thank you Ahmed!

[@amitshahu3661]

Very helpful video 👍👍,thanks

[@AbdullahGalal]

Welcome

[@laksht9503]

Excellent explanation

[@AbdullahGalal]

Glad it was helpful!

[@sowjanyaprabha965]

Simply superb

[@AbdullahGalal]

Thanks a lot

[@redboy8821]

Thanks for sharing your knowledge

[@AbdullahGalal]

My pleasure

[@vamadeva8800]

Thank you so much for your explanation

[@AbdullahGalal]

Thank you Vama

[@amitkumarsingh2749]

Sir Thank You so much for the explanation.

[@AbdullahGalal]

Very welcome

[@Ton-gm3lf]

Good! Thank you HERO!

[@AbdullahGalal]

Did this help you at work?

[@jogdeepak]

Namaste !! Yella habibi very good explanation.

[@AbdullahGalal]

Thanks

[@bolognesi4094]

Excelent!

[@AbdullahGalal]

Thank you

[@meeraupadhyay6501]

amazing and simple explanation.. :)

[@AbdullahGalal]

Thank you Meera! Subscribe for more 😉

[@meeraupadhyay6501]

@@AbdullahGalal already subscribed 🎉

[@damodargouda5274]

Very good video it's really valuable

[@AbdullahGalal]

Thank you damodar

[@AbdullahGalal]

Thank you damodar

[@suneelkumar4384]

Thank you for video

[@AbdullahGalal]

You are welcome

[@terminator5275]

Nice explanation

[@AbdullahGalal]

Thanks and welcome

[@Shehzad0414]

Jazakallah Brother

[@AbdullahGalal]

Jazana Allahu w Eyakom brother

[@alcionearaujo7828]

Very nice, thaks

[@AbdullahGalal]

Most welcome

[@saidbyr]

Thank you man, you have very clear explanation, Allah gives you more success in your both life :) And I have a question maybe you read the relevant doc; Can we realize the currency difference on control code currency; purchasing currency = EUR Controlling currency = USD Company code currency=EGP

[@RA-rh5lb]

Thank you so much for the foreign currency valuation business process you have showed here. You have explained so well especially on payable domestic adjustment account.. this is a great tip i have learned from you. Always obliged to you for the great knowledge you share here.

[@AbdullahGalal]

Thank you for following Raj, glad I could help

[@joylodh2709]

Good document with nice explanation..If possible can you please add the foreign currency customization/configuration video, Thanks

[@AbdullahGalal]

Welcome, I'm only explaining the business process and concepts for now, the configuration can be easily found online once you understand the concept

[@sahilmanhas8828]

Very good explanation. Please also make a video on difference between Revaluation and Translation Run

[@AbdullahGalal]

Will do my best! Thank you

[@sapficowithritu8750]

You r great 💖

[@AbdullahGalal]

Thank you so much 😀

[@sapficowithritu8750]

@@AbdullahGalal R u from France Abdullah

[@rajug2316]

Thank you abdullah for clearly explaining the concept, can you please make a video on APP automatic payment program

[@AbdullahGalal]

Hi Raju, I already did! kzbin.info/www/bejne/hnuVlHSGd918iqs

[@eddie62ma]

Thanks Abdullah! Very well explained How about going further with a new video explaining the usage of the simulation ledger? As it is new in s4hana? Thanks again

[@AbdullahGalal]

Haven't used it in any projects, will have to throughly study it first

[@shaikjunaid5118]

your explanation is very well, but we need back end configuration for better understanding.

[@AbdullahGalal]

Thanks! All the configuration steps are available in the documents library shared with the elite / platinum channel members www.youtube.com/@abdullahgalal/join

[@danimba1000]

Another Excellent Video. you have used payable domestic adjustment account while posting the unrealized exchange rate differences. Is it open item managed account?

[@AbdullahGalal]

Haven't checked this one, it's the default setup in the S4HANA 1709 from SAP CAL

[@laxmikantapatra8423]

Hi sir...really it was a very nice explanation..i understood what i was looking for..but..it could be better..if you will have another video regarding how it would have impact in financial statement & p/l accounts as well and how do we reconcile it....& kind of error we may face ..please its my request sir.☺☺

[@AbdullahGalal]

I will try my best

[@rajeshmandadi2172]

Excellent explanation... easy way of understand Realised & Unrealised Loss... what is the T-code in ECC, to Run in month end?

[@AbdullahGalal]

Check the video @9:26

[@sharabupullarao5233]

Nice video plz do videos on controlling

[@AbdullahGalal]

Thank you, will get to CO eventually

[@rakeshkottam5863]

Hi abdulla….the way of explanation very good.. can you please explain lockbox thank you 😊

[@AbdullahGalal]

Noted, thank you Rakesh

[@88pianissimo90]

Superb explanation... I think the difference amount is updated in BSBW table in ecc... Is this table same in S4 Hana?

[@sheenagupta6169]

I love the way you explained it. How can we check if FX currency posted ok? I would like to do a validation check. Like going in TB AND getting FX transations and simply check. Is it possible?

[@AbdullahGalal]

When you run the forex calculation program it shows a full report. You can compare the forex rates against the ones in transaction OB08

[@hamzataboubi6744]

👍

[@DiwakarreddyPerugu]

Hi, Very detailed application. Thanks for it. Based on your video i tried to POC by creating Extension ledger with extension ledger type S(Simulation) and completed required FCV configuration. But when i try to exceute FAGL_FCV with simulation option and if i try to enter simulation ledger i got error Enter a valid simulation ledger (Message no. FAGL_CLOSING_ACT214). i have cross checked config and everything looks good. Any idea what could be the issue. Thanks

[@husalazar]

Hi Abdullah, thanks for your video. Really helpful. I would like to know if you know about ECS - Error Correction and Suspense Accounting. This is bind to the FCV execution. Do you how it should be configured for S/4 Hana in order to catch errors when FCV is executed, and what are the different configurations points it has. Thanks for any help on this. Hugo S.

[@AbdullahGalal]

Thanks a lot for this comment! I never heard about ECS before and just read an SAP blog about it, sound very interesting. Please send me a message on LinkedIn and we can discuss more

[@brendacreelman483]

Your you tube was excellent. I do have a couple questions. 1. This demo showed the FAGL_FCV transaction for the valuation at month end. Your document displays showed TC and LC but not GC. Was there was an update to group currency as well? 2. What about the FC translation program? Are you using that as well? Here is my understanding. a. FC Valuation is used to re valuate TC to LC b. FC Translation is used to translate TC or LC (depending on config) to GC While in an ECC 6.0 system or S/4 Hana 1610 system the transaction codes appear to be the same for the month end jobs. However I thought that there were improvements in S/4.

[@AbdullahGalal]

Thank you Brenda, currency translation is used to translate to group currency for consolidation, check this blog here answers.sap.com/questions/11550050/index.html As for improvements in S4HANA, the transaction changed from FAGL_FC_VAL to FAGL_FCV not sure what changed in the performance or so

[@brendacreelman483]

True, but the translation program has changed. It is translating document currency to group currency. It used to translate local currency to group currency. I fully understand the valuation program that you showed in your youtube. The translation program was not addressed. I'm trying to figure out where in config to get the translation program to translate from local to group.

[@bolognesi4094]

Hi, thanks. Would like to see OBA1 - exchange rates differences configuration and how it is linked to the documents posted.

[@AbdullahGalal]

Check this amazing blog, there's no more I can say! blogs.sap.com/2019/05/06/s4-hana-finance-foreign-currency-valuation-transaction-fagl_fcv-simulation-ledger

[@mariaa8234]

Hi Abdullah, this is very helpful! Do you have a playlist to explain how to configure the acc postings to capture the exch gain/loss (min 7:36)? Thanks!

[@AbdullahGalal]

Here you go :) blogs.sap.com/2016/03/04/foreign-currency-valuation-simplified/

[@agnelsandeep7839]

What are the reports that end user can view in foreign currency valuation apart from the logs

[@ldykbs2785]

Hi, currently my client wants to remove the GL Advance Payment from the open item config of Foreign Currency Revaluation. As they thought that GL Advance is not a monetary asset, so it should not be revaluated. What if I take out the down payment GL from revaluation config? any ideas what would be the impact?

[@energetic571]

Is it possible to get information about valuation by vendor and contract? Because we do information in our local currency to give report internal and external users. Thanks in advance.

[@praveenreddy3163]

Hi sir, Nice explanation,how realised amount difference is adjusted when we do payement

[@AbdullahGalal]

The amount in foreign currency is multiplied by the exchange rat at time of payment and any difference in local currency is posted as FOREX

[@kashjawed]

Great video. Is is "Paybls Domestic Adj" account a regular account or a reconciliation account?

[@AbdullahGalal]

Regular account

[@imtiazhussainkhattak143]

Please make a video on how to create Functional Area wise P&L.

[@AbdullahGalal]

Will add to the plan

[@shaily1589]

Hello Mr Abdullah, like all other videos, this too is very conceptually informative. However, I have a query with respect to the explanation you gave in the video. For the invoice that was posted, corresponding payment entry was also posted, which would have closed the invoice. then how come Invoice got valuated for unrealized loss?

[@AbdullahGalal]

Let's say we posted an invoice today in month "X" and this invoice was paid in the following month "X+1" @ end of month "X" when doing the closing, we have to run the FOREX program and post unreallized FOREX gain/loss, the program will also post a reversal entry in beginning of month "X+1" @ Payment in month "X+1" the system will automatically post the realized FOREX gain/loss This is what I explained in the video, try watching it again after this explanation and I hope it will be clear

[@MusicalTouchIRavi]

Sir you explained it very nicely. I understood the whole process but my question is that - I posted an invoice on 15th jan. Now on 31st jan my exchange rate is changed and I have not made the payment yet so will I get the unrealized gain loss entries before payment on 31st. Bcoz currently in my system I m getting some errors, so cant understand whether its config issue or its a standard process.

[@AbdullahGalal]

Yes, since you have open unpaid invoices, if you run the foreign currency valuation transaction correctly it should give you unrealized gain/loss

[@quangtuan202]

As per IAS 21, foreign currency valuation difference is recognised in profit or loss. So in the next year, we have to reverse profit or loss we recognised this year because realized gain/loss in the nex year (when the payment is made) includes profit or loss recognised in this year?

[@AbdullahGalal]

Realized gain/loss happens only when the actual payment is done so it can't happen again next year for the same items so no need to reverse that Unrealized is reversed and recalculated every month

[@swatipurania8017]

Hello sir , really liked your video. here i understand if we deal with foreign vendors or customers. but i am little confused about normal GL transactions , suppose we take a bank loan from a foreign bank . how to see the realized and unrealized profit or loss. please help me out sir.

[@AbdullahGalal]

It's the same way, the same program can be used to valuare GL accounts, and when paying the loan you will get realized FX

[@nourbouabdallah2619]

hi sir thank you for your effort. i have a question when it comes to the foreign exchange difference amount. acctually it is posted as Thresh hold write off (due to tolerance regulations) yet i need it to be posted in forex gain/loss line in my document for the business specifications. Could you please give me a hint on how i can map the amount of differences in the required account :/

[@Aleee-ez6mu]

Its effect on other revenue and expense account in the name of loss or gain on foreign exchange rate by automatically posting of journal entry through account determination

[@sreenik3935]

But ,it would have great ,if you would have shown the Valuation are/Method and Un relized /relized configuration with screens. Thank you.

[@AbdullahGalal]

Keep watching, will get there eventually :)

[@rahimanshaik5414]

hi, thanks for your video. as well as i need your advise to get the job on SAP consultants. currently i am working on end user and searching job on fico from last 2 years but no use. in interview they are asking lot of questions which i did not cover in class room training and online training. what is the best way to get the job to prove my self.

[@AbdullahGalal]

What are the questions you received in the interviews?

[@cristianvelicu8427]

Hello, Can you tell me same thing about the whey that SAP revert the unrealized differences posted and if from configuration we can control the logic of using loss or revenue accounts in the document generated for reverting it? Thanks

[@AbdullahGalal]

I showed the reversal entry in the video. The configuration for the loss or gain GL account is in transaction OBA1

[@user-zi6yg1ip6r]

اشكرك عالشرح الرائع والوافى .. وارجو الرد على سؤال محير بالنسبة لى .. ما هو الفرق بين KDB و KDF .. حضرتك هنا استخدمت الKDF .. فياريت لو توضح الفرق بخصوص امتى استخدم اى منهم .. ولك جزيل الشكر

[@AbdullahGalal]

سؤال عظيم، لم أجد شرح اوفى من هذا wiki.scn.sap.com/wiki/plugins/servlet/mobile?contentId=477826180#content/view/477826180 اقرأه و أخبرني إذا أجاب عن سؤالك

[@user-zi6yg1ip6r]

اللى فهمته ان KDB بيستخدم لتقييم الارصدة الموجودة فى الميزانية (non-open items) زى ارصدة البنوك مثلا لانها بطبيعتها اى تغير فى سعر الصرف عليها بيكون realized gain/loss ، اما ال KDF بيستخدم لحسابات الopen items زى العملاء والموردين لانها بيبقى فيها احتمالين اما realized او unrealized .. اتمنى اكون فاهم صح على قد المرحلة اللى انا فيها دلوقتى لان فيه تفاصيل كتير لسه موصلتلهاش​

[@AhmedNasser-it8pm]

what is the difference between t-code f.05 and FAGL-FCV

[@VT-wk6qv]

Hi, am clear that from 15/1 and end of Jan the fx is unrealised of 2k. How about from ebd of Jan till payment date of 15/2? How much realised? Is the unrealised of 2k going to be reversed?

[@AbdullahGalal]

- The unrealised is reversed first day of next month (as you choose when running the FX program) - The realised will be posted during the clearing of the invoice in 15/2 depending on the FX rate then

[@MAhmoudEl-Kelany]

Do you mean The general ledger didn't affected by transaction of revaluation at the end of reporting date So supplier balance in general ledger doesn't equal supplier balance in balance sheet As this transaction only for reporting ?

[@AbdullahGalal]

GL is impacted but in a different account than vendor reconciliation Vendor line items = vendor GL reconciliation account Vendor adjusted balance in BS = Vendor reconciliation GL + Vendor adjustment for FOREX GL

[@vamsi8558]

I need one help. How to find foreign currency valuation amount difference coming since morethan 6 month's. We know which GL code is coming difference but can't figure it out which documents can you give how to find those documents can you please tell me. We checked sap foreign currency valuation table through status nothing showing in that. Please let me know

[@AbdullahGalal]

First thing that comes to mind is use GL line items report and display the currency rate column then export to Excel and calculate the difference from the current foreign currency rate

[@arakot265]

Per IFRS is valuation gain or loss termed as realised or unrealised ? Thank you

[@AbdullahGalal]

Both of them exist realized is when we actually do the payment or clearing and there's a FOREX différence unrealized is when we evaluate our open items at period end as explained in the video

[@novnaveen]

Hi Abdullah, For FCV, other than Recon accounts, can we valuate the GLs maintained in Foreign currency only? or can we revaluate GLs maintained in local currency and transactions are in foreign currency. Thanks

[@AbdullahGalal]

Hi Naveen, - Revaluation can be done for all foreign currency accounts even if they are not recon accounts - When a transaction is posted to a local currency account, it's translated on the spot and posted in local currency, and it can't be revaluated.

[@novnaveen]

@@AbdullahGalal Thanks for the explanation Galal. But, regarding your second statement, does it holds valid for all GLs or GLs which are not 'Open item managed'.(GLs maintained in Local currency, and transaction in foreign currency).

[@mahfoozansari6928]

Thanks, u did not show where we should put the exchange rate for unrealized foreign currency valuation at month end.

[@AbdullahGalal]

Transaction code OB08