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Currency Translation in Controlling

There are three main currencies used in controlling: 1) controlling area currency, which is set when a controlling area is created; 2) object currency, which can be different for each object like cost centers and is usually the company code currency; and 3) transaction currency, which documents are posted in and can differ from the other currencies. The system will convert between these currencies. Additional currencies that can be used include local currency, group currency, hard currency, index-based currency, and global company currency when using cross-company controlling.

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Himanshu Oswal
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69 views

Currency Translation in Controlling

There are three main currencies used in controlling: 1) controlling area currency, which is set when a controlling area is created; 2) object currency, which can be different for each object like cost centers and is usually the company code currency; and 3) transaction currency, which documents are posted in and can differ from the other currencies. The system will convert between these currencies. Additional currencies that can be used include local currency, group currency, hard currency, index-based currency, and global company currency when using cross-company controlling.

Uploaded by

Himanshu Oswal
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Currency translation in Controlling

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Created by Miya Wang on Jul 29, 2015
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Three currencies can be used in Controlling, they are

1. Controlling area currency

2. Object currency

3. Transaction currency

Controlling area currency


The system uses this currency for cost accounting and this currency is set up when you create a controlling area.
It based on "the assignment control indicator" and "the currency type".
Object currency
Each object in controlling (e.g.: Cost Center, Internal Order, etc) may use a separate currency, which is specified in
master data. It mean that when you create an object in CO, the SAP system automatically defaults the currency of the
company code to which the object is assigned as the object currency. Note that, you can specify a different object
currency only if the controlling area currency is the same as the company code currency.
Transaction currency
Documents in Controlling are posted in the transaction currency. The transaction currency can differ from the controlling
area currency and the object currency, and the system automatically converts the values to the controlling area currency
at the exchange rate specified.

All these currencies are stored in the total records and the line item tables.
And system will convert the currencies in this way:
(1) From transaction currency to controlling area currency
(2) From controlling area currency to object currency

If you use "cross-company code" controlling, the following additional currencies may also appear as controlling area
currencies:
- Local Currency
- Group Currency
- Hard Currency
- Index-Based Currency
- Global Company Currency

Local Currency
Company code currency (Country currency) used for Local Ledgers in external accounting.
For each company code you can specify one or two parallel currencies that is Second and Third local currencies and
are stored in the documents and updated parallel to the local currency in the general Ledger.

Group Currency
Group currency is the currency in which the group balance sheet is displayed and you can also specify it as a parallel
currency (Additional local currency) for a Company Code.

Hard Currency
Secondary currency for countries with high inflation and you can specify it as a parallel currency (Additional local
currency) for a company code.
Note that you need to specify the hard currency in the detail screen for the corresponding country to allow the use of the
hard currency.

Index-Based Currency
Are country-specific, fictitious currency stipulated in certain countries with high inflation for tax returns.
You can specify it as a parallel currency (Additional local currency) for a company code.
Note that you need to specify the index-based currency in the detail screen for the corresponding country.

Global Company Currency


In the CO application component you can create companies to represent divisions, regions, or product groups, then you
can specify it as a parallel currency (Additional local currency) for a company code.

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