What is foreign currency position in SAP FI-GL-CU-MCA - Multi Currency Accounting?

SAP Term: foreign currency position

• Component: FI-GL-CU-MCA

• Component Name: Multi Currency Accounting

• Description: Classification characteristic for business operations that are made in foreign currency rather than the functional currency and can be relevant for postings. You can use different MCA position types to categorize these business operations. On the balance sheet, the foreign currency positions are represented by corresponding foreign currency position accounts.

Smart SAP Assistant

• Key Concepts: 
  Foreign currency position is a term used in SAP's Multi Currency Accounting (MCA) component of the Financial Accounting (FI-GL) module. It is the difference between the total debit and credit amounts of a company's foreign currency accounts. This difference is calculated in the company's functional currency and is used to determine the company's net foreign currency position. 
  
  How to use it: 
  In order to calculate a company's foreign currency position, the total debit and credit amounts of all of its foreign currency accounts must be determined. This can be done by running a report in SAP that will display the total debit and credit amounts for each foreign currency account. Once these amounts are known, the difference between them can be calculated in the company's functional currency to determine its net foreign currency position. 
  
  Tips & Tricks: 
  It is important to remember that when calculating a company's foreign currency position, only accounts denominated in foreign currencies should be included. Accounts denominated in the company's functional currency should not be included as they will not affect the net foreign currency position. 
  
  Related Information: 
  The net foreign currency position can be used to determine whether or not a company needs to take action to reduce its exposure to foreign exchange rate fluctuations. It can also be used to assess the potential impact of changes in exchange rates on a company's financial statements.