Foreign Currency Valuation

[Former Member]

Good day,

When we execute APP - Perform Foreign Currency Valuation we get the following error messages "Account 72040000 requires an assignment to a CO object" and "Account 72540000 requires an assignment to a CO object"

The cost center field should not be mandatory when we execute the APP as the cost element for these two accounts was set to 11 - Revenue, therefor we also have not maintained a default cost center in SSCUI ID 100003 for these accounts. The cost object (if any) and profit center for the unrealized gain/loss posting must be derived by the system using document splitting.

However, although the G/L Accounts for Realised Gain&Loss has exactly the same settings as those of Unrealised Gain&Loss the postings generated upon payment clearing post without any error and populates only the profit center where necessary. 

We understand that a CO object is not necessary a cost center, but the argument is that we do not want the system to enforce the entry of a CO object for the generation of the automatic unrealized gain/loss posting.

This works perfectly for the automatic posting of realized gain/loss – the question is why is it not working for unrealized gain/loss?

Please advise on the system behaviour.

See attached word document of scenarios processed and tested. Please note that we have reset and reversed the clearing entries in order to use the same documents in the next scenario tested.

Regards,

Andro

[waman_shirwaicar · Accepted solution]

Dear Andro,

The basic law of Controlling is that a cost element needs to be assigned to a cost object so that the amount gets posted to that cost object.

I would expect that the G/L accounts for the gain/loss postings are P&L accounts which by default are cost elements.

In case of realized gain/loss could you check to what cost object the amount has been posted to ? And how this cost object was assigned ?

regards

Waman

[Former Member · Accepted solution]

Dear Waman,

Document splitting derives the appropriate profit center to which the foreign currency gain/loss must be posted to.This is the requirement for both realized and unrealized gain/loss.

The system DOES calculate the gain/loss per profit center correctly, but when we try to POST the unrealized gain/loss, the system forces us to provide a COST CENTER (or any other cost object) for the posting.

This is what we do NOT want.

The P&L GL account has a cost element with a category 11 (revenue) which is NOT supposed to enforce a cost center (this is also how it worked in ECC6). This is also how the realized gain/loss accounts are setup and for that posting it works and doesn’t enforce the entry of a cost center.

So, there must be some “logic” built into the FAGL_FC_REVALUATION program that works different than realized gain/loss?

If we maintain a default cost center for unrealized gain/loss, the document splitting functionality is overwritten and therefore undone..

So again the question, WHY does unrealized gain/loss postings enforce the entry of a cost center whereby realized gain/loss postings don’t?

Hope this is more clear?

Regards,

Andro

[waman_shirwaicar · Accepted solution]

Dear Andro,

As per the basic law of Controlling a cost center cannot be a real account assignment for revenues (cost element celem category 11).

From the profit center derived during document splitting a cost center would be derived. But this would be a statistical account assignment.

So the system still needs a real account assignment. I do not think the system asks you for cost center; it basically asks you for a cost object where the values can be posted to. "Account 72540000 requires an assignment to a CO object"; can be any cost object which can carry revenues.

I believe you should ideally assign revenues to profitability segments (by setting the check mark in SSCUI).

In ECC6 a P&L G/L account will be a cost element only if you customize it to be so. However in S/4HC a P&L G/L account is by default a cost element and hence as mentioned earlier it needs a cost object. This cannot be avoided.

regards

Waman

[rb2020]

This did, thank you. It being called a "simulation" was very counter intuitive for me as a user. I now understand that selecting simulation is how to post actuals.

[rb2020]

Hi vchatman that was especially helpful, thank you. So now it is clear to me that if the "profitability segment" is checked off on those specific accounts within the default account determination configuration app, that a posting will go through despite the lack of cost center. I think we'll struggle a bit with the lack of cost center, but it looks like there are options to assign a cost center based on the profit center in that app as well, which I think i'll explore.

Here is one more hilarious question on the subject - does anyone know how to actually post the valuation? In my cloud version of the app, the very first screen has "posting settings", and my only option are "test" or "simulation". If I run those, there is no subsequent option to post the test transaction. What do I have to do to post?

[former_member132112]

Hi Rob,

Right below the "Simulation Settings" are two posting options:

1) Update run to execute in the foreground or 2) Use Batch input instead of ECS which will create a batch input session to be executed.

I hope this clarifies,

Victor

[rb2020]

Hi - looking at a very old chain here. andro.1994 did this actually answer your issue, or did you come into the solution somewhere else? I don't see how Waman's statement actually helps vs. simply restates the facts of what SAP is trying to enforce.

Or perhaps roland.dittus , if you could advise which SSCUI 100003 was? Either there is no longer a 100003, or the manage your solution app is incapable of searching for it for some reason.

I am also at a loss as to why the standard functionality of the system would be for a cost object to be necessary for that account, but for Currency Revaluation to not be capable of reliably assigning a cost object? If our desire/requirement is for a cost object related to the original posting to be assigned, what is the path for this, if any?

Even Arno's original strategy of simply making that account a "revenue" account, in hopes that document splitting then assigning a profit center will clear all the hurdles here, is technically a bit of a workaround (72040000 is originally a cost account I think).

[former_member132112]

Hi Rob,

In S/4HANA Cloud, a profit and loss account is by default a cost element as mentioned earlier. Therefore, it needs a cost object assigned to it.

Please see my comments below per the following statement--> The cost object (if any) and profit center for the unrealized gain/loss posting must be derived by the system using document splitting.

VC, 12/18 Comment: This is not always possible because there will be some cases where no cost object exists in the open items, only the profit center exists. In those cases, the system will need to default an account assignment for CE unrealized gain / loss postings.

Therefore, for those cases, if you select the Profitability Segment box, the system should pass the posting without a cost center being required for that posting.

Please refer to an attached document for a quick smoke test in one of our demo systems that shows the postings for both scenarios: 1) where there is no cost object on the original line item and 2) where there is a cost object on the original line item.

I hope this clarifies,

Victor

[RolandDP]

Andro,

for countries where you need to report by Cost of Sales Method of accounting, we use Functional Areas to show the account balances for the month in the right reporting line. This account has a default Functional area assigned.

However, you could designate a different functional area potentially, and you can maintain that in SSCUI ‎#100003.

Please check the following in your Q and P system:

See if the account(s) are listed under the company code you are having the issue with.

If not, just enter the account without designating a cost center or anything, just enter the account in the SSCUI and save.

If you still get the error, set the check mark under Profitability Segment and it will definitely work.

Let us know if you were able to resolve the error this way

Roland

[Former Member]

Hi Roland,

Sorry for the delay in response.

I have added the tick for profitability segment in SSCUI ID - 102639 Manage Default Account Assignments. (See image attached)

When I run the Forex revaluation, I still get the error message Account 72040000 & 72540000 requires an assignment to a CO object. Both these account has a Cost element category of 11 (revenue) with field status group of YB29 (revenue accounts).

Any advise or guidance would be appreciated.

Regards,

Andro