FI / FICOintermediate

FICO Foreign Currency Valuation Part 2: Valuation Methods, Rate Types and Accounts

Key takeaway

Configure foreign currency valuation: valuation methods (procedure, rate types, document type), valuation areas linked to accounting principles, exchange rate difference accounts for open items and GL balances, and which accounts are valuated or excluded.

Explanation

📌 KEY POINTS
✅ Valuation methods (OB59) define procedure (e.g. strict valuation or lowest value principle), rate types and document type.
✅ Valuation areas link a method to an accounting principle/ledger, enabling different valuations per GAAP.
✅ Account determination (OBA1) defines gain/loss and balance sheet adjustment accounts for open items and GL balances.
✅ Reconciliation accounts are valuated via open items; FC GL accounts without open items via balance valuation.
⚠️ Accounts like revenue/expense are not revalued — only monetary balance sheet items.

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▶ WHERE WE ARE
Part 1 explained concepts. Now configuration.

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▶ 1. EXCHANGE RATE TYPES

M (average) and others; rate maintenance.

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▶ 2. VALUATION METHODS

Strict vs lowest value; rate type for debit/credit balances.

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▶ 3. VALUATION AREAS

Area per principle/ledger.

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▶ 4. ACCOUNT DETERMINATION

Open items per recon account; balance valuation per GL account.

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▶ 5. SCOPE

Which accounts are valuated; exclusions.

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▶ STEP BY STEP

Review valuation method in OB59.
Assign valuation area to principle.
Maintain OBA1 accounts.

✅ CHECKPOINT: a test run proposes correct accounts for all FC accounts.

Code example

ABAP Code

===== CONFIG MAP =====Exchange rates ........ OB08 (rate type M) | rate type settings OB07Valuation method ...... OB59 (procedure, rate types, doc type)Valuation area ........ SPRO: define valuation areas → accounting principleAccounts .............. OBA1: KDF (open items, per recon account), KDB (GL balance valuation) ===== EXAMPLE =====Valuation area IF (IFRS, strict) | LG (local GAAP, lowest value) → run separately per area

Real project scenario

During a configuration workshop, local GAAP required the lowest value principle while IFRS used strict valuation. Two valuation areas with different methods, each linked to its principle, delivered both results.

Common mistakes

One method for all principles.
Missing OBA1 entries.
Valuating P&L accounts.
Wrong rate types.
No test runs.

Best practices

Area per principle.
Complete account determination.
Define scope.
Test runs.
Document methods.

Interview angle

Questions: "What does OB59 control?", "What is a valuation area?", "Which accounts get revalued?"
Strong answer: methods, areas and principles, OBA1 accounts, scope.

Practice this lesson

Quick check

1. When configuring a valuation method in transaction OB59, what does the 'Strict Lowest Value Principle' setting control?

2. Besides the exchange rate gain/loss account, which additional account type is required when valuating customer or vendor open items so that the subledger balance itself is not changed by the valuation posting?

3. When multiple valuation methods are needed for different accounting principles (e.g., local GAAP versus IFRS) in the same foreign currency valuation process, what SAP configuration concept enables this parallel valuation?

Interview questions

1. How would you apply Foreign Currency Valuation in a real SAP project? Walk through the design or implementation approach.

Answer it in your own words first, then compare.

2. What are the most important design decisions, trade-offs, and best practices in Foreign Currency Valuation?