BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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High rate of interest principle
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Revalue only
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Strict lowest value principle
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Lowest value principle
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Detailed explanation-1: -Definition. Cross-chart of accounts specification that contains the valuation approach to be used for carrying out a foreign currency valuation as part of the closing operations, for example, according to the lowest value principle.
Detailed explanation-2: -Foreign currency valuation is a term used by vendors of Enterprise Currency Management vendors to record the impact of foreign currency changes into its FX-denominated assets, liabilities, revenues, expenses, gains and losses.
Detailed explanation-3: -To perform a foreign currency valuation, from the SAP Easy Access screen, choose Accounting → Financial Accounting → General Ledger/Accounts Receivable/Accounts Payable → Periodic Processing → Closing → Valuate → Foreign Currency Valuation (New).
Detailed explanation-4: -When a foreign currency valuation is done in SAP, all open items and balances in a foreign currency will be converted to local currency using the current exchange rate maintained in the system. After taking FCV run SAP creates two postings.