What is currency devaluation in SAP EC-CS - Consolidation?

SAP Term: currency devaluation

• Component: EC-CS

• Component Name: Consolidation

• Description: The reform of a monetary currency by means of governmental statutes. Typically, devaluation of a currency takes place only in countries with high inflation. It can lead to the introduction of a new national currency. A consolidation unit that has prepared its financial statements in a currency affected by such devaluation needs to change its currency key and translate its local currency amounts into the new currency.

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• Key Concepts: 
  Currency devaluation is a process in which the value of a currency is reduced relative to other currencies. This can be caused by a variety of factors, such as economic instability, government intervention, or market forces. In the context of SAP's EC-CS Consolidation component, currency devaluation can have an impact on the consolidation process. 
  
  How to use it: 
  In SAP's EC-CS Consolidation component, currency devaluation can be taken into account when consolidating financial statements. The system allows users to set up a currency devaluation rate for each currency in the consolidation process. This rate is then used to adjust the exchange rate between the currencies being consolidated. 
  
  Tips & Tricks: 
  When setting up a currency devaluation rate in SAP's EC-CS Consolidation component, it is important to ensure that the rate is accurate and up-to-date. This will ensure that the consolidation process is accurate and reliable. 
  
  Related Information: 
  For more information on currency devaluation and its impact on the consolidation process, please refer to SAP's documentation on EC-CS Consolidation.