| # FASB 52 Foreign currency translation FASB 52 is a guideline for foreign currency translation issued by the Financial Accounting Standards Board (FASB). You can perform FASB 52 currency translation for a specific rate type and specific ledger account. You must define translation adjustment schemes to link rate types to ledger accounts. Using translation-adjustment schemes You can use one translation adjustment schemes, or you can use two translation-adjustment schemes one after the other: Currency 1 -> [Translation Adjustment Scheme A] -> Currency 2 ->[Translation Adjustment Scheme B] -> Currency 3 ERP LN retrieves the currency rates from the Currency Rates (tcmcs0108m000) session. However, if you use two translation adjustment schemes, you must define the currency rates for the rate types of the second translation adjustment scheme in the Additional Currency Rates (tfgld5106m000) session. In addition, if you use a dependent currency system AND the currency base (input currency) is the reference currency, you must also define the currency rates for the rate types of the first translation adjustment scheme in the Additional Currency Rates (tfgld5106m000) session. Note If you use a independent currency system, the input currency must not be the same as one of the following currencies: Local currency Reporting currency 1 Reporting currency 2 The calculated adjustment amounts are saved on the defined ledger account. Note The balance amount of all profit and loss accounts is booked according to the parameters set in the Company Parameters (tfgld0503m000) session. Depending on the balance method, the balance amount is posted to one or more accounts. There are no transactions posted to period zero, which is the opening balance. Example The following calculations can be required for an FASB 52 foreign currency translation:
| Input currency | Output currency
Translation Adjustment Scheme A | Local currency | Functional currency
Translation Adjustment Scheme B | Functional currency | Currency for FASB reporting
where: Input/output currency = the source and target currency. Local currency = for example, the subsidiary's local currency. Functional currency = the most frequently used currency in the organization. For example, if 70% of your sales is expressed in EUR, this is the functional currency. Currency for FASB reporting = one of the home currencies of the holding company, for example, USD. Related topics To set up and perform FASB 52 Foreign currency translation |