Multi Currencies and Transfer Prices

in Universal Journal
Michael Conrad, SAP SE
May 27 2016 E2E Solution/Solution Capability:
Product Version / LoB: Financial Accounting and Close
SAP S/4HANA Finance, on-premise edition 1605
SAP S/4HANA, on-premise edition 1610 / LoB Finance
Part 1:
Multi Currencies in Universal Journal
Objectives

At the end of this lesson, you will know:

There are new freely defined currencies available in the
universal journal.
The new currencies are filled real-time in all operational
postings by generic document wise currency conversion at
actual exchange rate.
There are selected processes (Open Item Management, Co
and GL Allocation), which calculate in all configured
currencies.

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Available Currencies in ERP

FI (BSEG) local Crcy 2nd local Crcy 3rd local Crcy In ERP we used to have
3 local currencies in FI (including NewGL)
CO (COEP) local (Obj) Crcy CO Area Crcy
2 currencies in CO
3 currencies in Material Ledger
ML local Crcy 2nd ML Crcy 3rd ML Crcy

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More Currency Flexibility Universal Journal of
S/4H

In S/4H Finance OP 1605 and S/4H OP 1610 Universal Journal supports

additional new parallel currencies
You can configure per company code and ledger 2 fix currencies and up to 8 freely defined currencies
Customer can configured new currency types in customer namespace.
Freely defined currencies for parallel G/L ledgers do not depend on leading ledger
Real-time currency conversion in Accounting Interface with balance zero per document for all currencies
The freely defined currencies are integrated in several business processes (e.g. Open Item
Management), for some specific business processes differences might occur (Clearing effects).

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
(ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

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Currency Fields of ACDOCA

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
Entry (ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

Local Currency
Currency type 10 *
ACDOCA fieldname HSL

Global Currency
Currency type of controlling area *
ACDOCA fieldname KSL

Freely Defined Currencies 1 8

You can configure any currency type *
There is no dependency on currency types of the leading ledger
ACDOCA fieldnames OSL, VSL, BSL, CSL, DSL, ESL, FSL, GSL

* If you activate parallel valuations with tranferprices, then there are additional rules/constraints valid.

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More Currencies in Universal Journal

Compatibility

FI (BSEG) local Crcy 2nd local Crcy 3rd local Crcy

Mapping of Currencies for

CO (COEP) Local (Obj) Crcy CO Area Crcy
Compatibility with existing FI / CO /
ML functionality
ML local Crcy 2nd ML Crcy 3rd ML Crcy
Migration of transaction data

Mapping examples

Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
(ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

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Configuration of Ledger and Currencies

Viewcluster FINSVC_LEDGER
Tx FINSC_LEDGER

Contains Maintenance Views for

Definition of Currency Types
Currency Conversion Settings
Ledger Master data
Company Code Assignment to Ledgers
Used Currency Type per Ledger / Company

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Currency Types

List of Currency Types is now extensible by customer defined currency types

SAP namespace 0* - 9*
Customer namespace Y* Z*
Settings Def. Level defines, whether currency conversion settings are maintained once globally or
specifically per company code
You can define your own descriptions of the currencies types in customer namespace, which is displayed in
UIs as field label.

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Currency Conversion Settings

Depending on the definition level (global / per company code) you use the corresponding
views for the conversion settings:
Currency only for Customer defined Currency Type
Source Currency Type (any other currency type can be used as source)
Exchange Rate Type
Translation Date Type
Realtime conversion operation postings in the period are converted if realtime conversion is set.
Otherwise the currency can be filled with foreign currency valuation in period end close.

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Ledger

Ledger master data

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Company Code Settings I

Assignment of Company Codes to Ledger

Local Currency is always Currency Type 10 *
Global Currency is always currency type of controlling area *
(It is empty, if the company code is not assigned to a controlling area.)
Freely defined Currency 1 8 can be configured here.

* If you activate parallel valuations with tranferprices, then there are additional rules/constraints valid.

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Company Code Setting II

Definition of Fiscal Year Variant

Posting Variant
Flag whether Parallel Accounting with Ledger or GL Accounts approach is used
Definition of the 3 currencies, which are relevant for BSEG (former T001A setting).
You can choose from the 10 configured currencies for ACDOCA.

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Company Settings Detail Screen I

Details Screen shows configured currencies and their source for currency conversion
You can add more currencies with button
You can see currency conversion details with buttons or

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Company Settings Detail Screen III

Details screen with currency conversion details

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Currency Conversion for new Currencies types

Realtime currency conversion for all currency types is possible

Balance zero per document guaranteed
CO area currency is now converted for all items (also non cost elements)
Processes with clearing-like logic ( open item clearing, allocations, . ) require
that the amounts are selected from historical data. This is not yet supported for all
processes. As fallback the amounts are converted with the current exchange rate.
In such a case the process might leave a leftover, caused by rounding differences
or different exchange rates.
Clearing-like logic for new currencies is available for:
o Open Item Management FI-AR, FI-AP, FI-GL
o CO Allocations and GL Allocations
Clearing-like logic for new currencies is not yet available for:
o Fixed Asset processes like depreciation
o ML processes
o CO settlement, reposting
o Regrouping AP/AR

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Company Settings Details Screen: Display of
Currency Type Integration into FI / CO Applications

3 FI Currencies (BSEG) are marked in the header of the box

2 CO Currencies

Currency
conversion
with balance zero per 3 FI-AA Currencies 3 ML Currencies
document
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Using New Currencies

New Installations
You can configure the new currencies in the universal journal.
Please carefully consider, which currencies are integrated with BSEG, FI-AA, CO,
ML, FI-AA, and which is generically converted.

Migration of Customer Installations

Migration from ERP or SFIN 1503
Old currency configuration is migrated without changes
S/4H Migration is not able to introduce new currencies.
Currency configuration of installation with Transfer Prices active makes use of the
new currency fields (see EKT for Transfer Prices or details).
Usage of additional currencies is not possible without a SLO project

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End of Part 1

Questions?

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Part 2:
Transfer Prices
Objectives Slide

At the end of this lesson, you will be able to:

Outline the changes in customizing and data model for the
transfer price solution in S/4 HANA Finance
Outline how historic data from ERP are migrated into
universal journal
Explain splitting of COGS in Transfer Price Environment

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Agenda

Changes in customizing and data model for transfer prices

Migration of historic data from ERP with active transfer prices
Splitting of COGS in Transfer Price Environment

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Transfer Price Solution in ERP

Multinational groups need to report profitability for the group in total and for
the individual units based on the operational flows.

Up to three parallel valuation methods for legal, group and profit center
valuation provide different perspectives on the value chain within a group:

Legal perspective looks at the business transactions

from the point of view of the affiliated companies including markups

Profit center valuation treats profit centers as if they were

independent companies using e.g. negotiated prices

Group valuation looks at the whole group eliminating markups

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Transfer Prices
Parallel Valuations Based on Different Views
America Europe Asia

E
PrCtr Product 1
USA
F J

MEX
PrCtr Product 2
Group
BRA

Legal view focuses on inter company pricing agreements

Group view focuses on eliminating intercompany profits
Profit Center view focuses on agreed management prices
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Transfer Prices in ERP

The update of parallel valuation in ERP in the different components is

extremely heterogeneous:

GL uses currency fields for 2nd and 3rd currency

CO uses parallel versions for actual date where the version 0
contains a full value and the parallel actual versions contain
the delta compared to version 0
Material Ledger uses currency types
Fixed Asset Accounting uses different depreciation areas

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Short Comings with Transfer Prices in ERP

The ERP solution for Transfer Prices had short comings:

Complexity because of heterogeneous treatment in the different
components
Especially the delta version logic in CO was hard to understand
No clear separation of management valuations
Insufficient currency flexibility
Intercompany services not covered

The complexity of the given ERP solution forced many customers to

implement their own solution e.g. with SAP BW

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Transfer Prices in S/4 HANA Finance 1605

We provide 2 Options:
Parallel valuations updated in parallel single-valuation ledgers
Use separate ledger for each valuation
transparent separation of postings and reporting of financial results
based on the various regulations

Parallel valuations updated in a multi-valuation ledger

use separate amount columns in the same ledger
reduce memory footprint
reduce effort and time for closing activities

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Architecture for parallel transfer price valuations

Configuration with Currency & Valuation Types in Universal

Journal Ledger
Alternative Options:
Parallel single-valuation Ledger BUKRS CURTP
(local)
CURTP
(global)
CURTP1 CURTP2 CURTP3 CURTP4 CURTP5 CURTP6 CURTP7 CURTP8

Ledgers 0L 1000 10 30 Legal View

Valuation is assigned to Ledger GR 1000 11 31 Group View
Option for new installations PC 1000 12 32 Profit Center View
Easier authorization concept

Multi-valuation Ledger
Currencytypes of all Ledger BUKRS CURTP
(local)
CURTP
(global)
CURTP1 CURTP2 CURTP3 CURTP4 CURTP5 CURTP6 CURTP7 CURTP8

Valuation can be assigned

0L 1000 10 30 11 31 12 32
No separate close needed
Memory footprint optimized
Default for Migration Legal View Group View Profit Center View

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Configuration of Universal Journal for Transfer
Prices

System with Transfer Pricing

Currency and Valuation Profil is defined
Transferprices is active for controlling area

-> then specific rules hold for the currency settings of the Universal Journal

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Currency Types for Transfer Price Valuations

Each currency types is assigned to a valuation view

Currency types in group or prctr valuation has an assingment to the corresposing
legal currency type.
The last digit does not represent the valuation (especially not for currency types in
customer namespace)
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Multiple Valuation Ledger vs Single Valuation
Ledger

Multiple Valuation Ledger

no valuation view assigned to the ledger
currency types of all valuations can be used in this type of ledger

Single Valuation Ledger

A specific valuation is assigned to the ledger
Only currency types of this valuation view can be used in this ledger

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Currency Fields of ACDOCA Transfer Prices
Rules
Universal Journal Local Crcy Global Crcy 1st free 2nd free 3rd free 4th free 5th free 6th free 7th free 8th free
Entry (ACDOCA) Crcy Crcy Crcy Crcy Crcy Crcy Crcy Crcy

Local Currency
Currency type 10 in multiple valuation ledgers or in ledger with legal valuation
Currency type 11 or 12 in ledgers with group or profit centre valuation
ACDOCA fieldname HSL

Global Currency
Currency type of controlling area in legal valuation in multiple valuation ledgers
Currency type of controlling area in valuation of the ledger in single valuation
ledgers
ACDOCA fieldname KSL

Freely Defined Currencies 1 8

Any Currency type can be configured in multiple valuation ledgers
Currency type with valutation of the ledger in single valuation ledgers.
2016
ACDOCA fieldnames OSL, VSL, BSL, CSL, DSL, ESL, FSL, GSL
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Currency Types in a Multipe Valuation Ledger

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Currency Types in a Single Valuation Ledger

Only currency types in profit center valuation can be used in this ledger
Local and global currency are also in profit center valuation
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How to Provide Compatibility to Classic CO World

In CO the transfer price solution had been based on additional CO actual

versions.

In universal journal the data model had been simplified and harmonized.

The ledger approach is used in universal journal for GL and all sub ledger.

All new functionality is built on the new data model.

However several historical CO transactions still expect data in the old

version format.

The CO compatibility views provide the CO data according old version

format (on the fly calculated).

So for compatibility reasons a mapping of CO versions to ledgers is required.

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Configuration Details Assign CO Versions to
Ledgers

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Configuration Example One Ledger Table FINSC_LD_CMP
determines which currency
types are stored in which
amount fields in table
ACDOCA

FINSC_LD_CMP
LD CC CURTPH CURTPK CURTPO CURTPV CURTPB CURTPC CURTPD CURTPE CURTPF CURTPG

0L 0001 10 (all) 30 (all) 31 (all) 32 (ML CO) 11 (CO) 12 (CO)

2. The currency types that CO

L1 0001 10 (all) 30 (all) 31 (all)
requires for all three versions
must be stored in table
ACDOCA in ledger 0L.

FINSC_VERSN_LD
COArea Versin Ledger
0001 000 0L 1. Read access to CO 3. Optional: Additional ledgers
actual data (=postings) will may exist. They are not
0001 0GR 0L
read the data from this evaluated by read-access by
0001 0PC 0L ledger (from table CO; so they do not need to
ACODCA). In this example contain all currency types that
from ledger 0L for all three CO would require.
CO versions: One record in
table ACDOCA stores the
data for three COEP
records!

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Configuration Example 2 Ledgers Table FINSC_LD_CMP
determines which currency
types are stored in which
amount fields in table
ACDOCA

FINSC_LD_CMP
LD CC CURTPH CURTPK CURTPO CURTPV CURTPB CURTPC CURTPD CURTPE CURTPF CURTPG

0L 0001 10 (all) 30 (all) 31 (all) 32 (all) 11 (CO)

L2 0001 12 (all) 32 (all) 2. The currency types that CO

requires for versions 000 and
0GR (here legal and group
valuation) must be stored in
table ACDOCA in ledger 0L.
FINSC_VERSN_LD
COArea Version Ledger 1. In this example, read
access to CO data will 3. The second ledger L2 has
0001 000 0L
read the data from ledger valuation view = PrCtr valuation in
0001 0GR 0L table FINSC_LEDGER. The
0L for versions 000 (legal
0001 0PC L2 valuation) and version currency types that CO requires
0GR (group valuation). for version 0PC must be stored in
The data for the other table ACDOCA in ledger L2.
version 0PC (PrCtr
valuation) will be read from
ledger L2.

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Agenda

Changes in customizing and data model for transfer prices

Migration of historic data from ERP with active transfer prices
Splitting of COGS in Transfer Price Environment

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Transfer Prices Migration to S/4 HANA Finance

Migration from ERP to S/4 HANA provides transformation of customizing

and transactional data into new financial data model.
Compatibility Views
In order to be non-disruptive the existing compatibility views (e.g. COSP,
COSS, COEP, COVP) had been enhanced
They allow a non-disruptive conversion and a stepwise adaptation
towards new world the compatibility views provide on the fly
transformation in between old world and new data model.

See more details in EKT slides for Migration

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Agenda

Changes in customizing and data model for transfer prices

Migration of historic data from ERP with active transfer prices
Splitting of COGS in Transfer Price Environment

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Cost of goods sold split in parallel valuation views

Trigger for COGS split is delivery document with respect to sales order

Posting of goods delivery has to support the splitting of the COGS in local,
group and/or profit center valuation. The basis for the COGS splitting shall
be the related sales order item cost estimate or released material cost
estimate of the corresponding valuation view.

If no cost estimate exists for the related valuation view, no COGS split will
be created for the valuation view !

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Splitting of COGS in Transfer Price Environment

Separate Split Schemes can be defined for separate cost component structures

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Split Scheme Assignment

A Split scheme has to be assigned to a company and valuation views

COGS scheme can explicitly

assigned to a specific valuation view

No assignment of a valuation view

means the COGS split scheme is
relevant for all available valuation
views of this company

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COGS split in journal entry supports fix/var costs
and parallel valuations

Planning:
Cost Estimate in local valuation (0) Cost Estimate in group valuation (1) Cost Est.in profit center valuation (2)
Multilevel Cost Comp. Total Fix Cost Comp. Total Fix Cost Comp. Total Fix
Cost Estimates Material 220 USD 0 USD Material 110 USD 0 USD Material 275 USD 0 USD
for finished materials Production 300 USD 100 USD Production 300 USD 100 USD Production 300 USD 100 USD
in parallel valuations Overhead 150 USD 50 USD Overhead 150 USD 50 USD Overhead 150 USD 50 USD

& fix/variable costs

COGS Scheme for COGS Scheme for COGS Scheme for

local valuation group valuation profit center val.

Journal Entry with document type delivery of goods (WL)

Trans Line Ledger Account Company Company Group Group Group Group
action Item Currency / Currency / Currency / Currency / Currency / Currency /
legal legal (fix) Group val. Group Profit Center Profit Center
Actual: (total) (total) val.(fix) val.(total) valuation.(fix)
BSX 1 0L Finished goods -670 USD 0 USD -560 USD 0 USD 725 USD 0 USD
COGS split on goods
GBB 2 0L COGS_1 670 USD 150 USD 560 USD 150 USD -725 USD 150 USD
delivery in parallel
3 0L COGS_1 -670 USD - 150 USD - 560 USD - 150 USD -725 USD - 150 USD
valuations and & 4 0L COGS_Material 220 USD 0 USD 110 USD 0 USD 275 USD 0 USD
fix/variable costs 5 0L COGS_Production 300 USD 100 USD 300 USD 100 USD 300 USD 100 USD
(same accounts) 6 0L COGS_Overhead 150 USD 50 USD 150 USD 50 USD 150 USD 50 USD

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Lesson Summary

You should now be able to

Outline the changes in customizing and data model for transfer
prices
Outline Migration of historic data from ERP with active transfer
prices
Explain Splitting of COGS in Transfer Price Environment

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End of Part 2

Questions?

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Thank you

Contact information:

Michael Conrad
SAP SE
Michael.Conrad@sap.com

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