In SAP S/4HANA, foreign currency valuation is performed to revalue open items in supplier accounts at the end of a period. Since the valuations are intended only for period-end reporting and will be reversed, the system uses a specific G/L account to post the valuation differences. Let’s analyze each option to determine the correct answer.
Explanation of Each Option:
B. Adjustment G/L account for foreign currency
Correct : The adjustment G/L account for foreign currency is specifically designed to record valuation differences resulting from foreign currency revaluation. This account is used to post unrealized gains or losses due to exchange rate fluctuations. Since the valuation is temporary and will be reversed, the adjustment account ensures that the supplier reconciliation account remains unaffected.
Reference : According to SAP documentation, the adjustment G/L account for foreign currency is the standard account used for posting valuation differences during foreign currency revaluation.
A. Individual supplier accounts with special G/L indicator
Incorrect : Supplier accounts with a special G/L indicator (e.g., down payments or guarantees) are not used for posting foreign currency valuation differences. These accounts are reserved for specific types of transactions and do not serve the purpose of recording temporary valuation adjustments.
Reference : Special G/L indicators are used for unique accounting treatments but are not relevant for foreign currency valuation postings.
C. Alternative reconciliation G/L account
Incorrect : The alternative reconciliation G/L account is an optional account used for specific reconciliation purposes, such as alternative account assignments. It is not used for posting foreign currency valuation differences. The primary reconciliation account for suppliers remains unchanged during the valuation process.
Reference : Alternative reconciliation accounts are not involved in foreign currency valuation postings.
D. Supplier reconciliation G/L account
Incorrect : The supplier reconciliation G/L account is the main account used to reconcile supplier transactions. However, during foreign currency valuation, the system does not post directly to this account to avoid altering the actual balance of the supplier account. Instead, the valuation differences are posted to the adjustment G/L account.
Reference : The reconciliation account is updated only during actual transactions, not during temporary adjustments like foreign currency valuation.
Key References to SAP S/4HANA Documentation:
SAP S/4HANA Finance for Foreign Currency Valuation : Explains the role of the adjustment G/L account in posting valuation differences for open items.
SAP Help Portal - Foreign Currency Revaluation : Provides detailed guidance on configuring and executing foreign currency valuation, including the use of adjustment accounts.
Reconciliation Accounts in SAP S/4HANA : Highlights the distinction between reconciliation accounts and adjustment accounts for foreign currency postings.
Period-End Closing Activities : Describes how foreign currency valuation is performed and reversed as part of period-end reporting.
