What is historical currency translation in SAP FI-LC - Consolidation?

SAP Term: historical currency translation

• Component: FI-LC

• Component Name: Consolidation

• Description: An interpretation of translated financial statement figures that is equivalent to those of financial statements produced in reporting currency. This goal can be realized by using the exchange rate valid at the time to which the item to be translated relates. &EXAMPLE& Fixed assets can be translated using an exchange rate from the year or period of acquisition. Shareholders' equity and investments can be translated using an exchange rate valid at the time that these were entered, formed, or made available.

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• Key Concepts: 
  Historical currency translation is a process used in the FI-LC Consolidation component of SAP to convert financial statements from one currency to another. This process is used to compare financial statements from different countries or regions, and to ensure that the financial statements are accurately represented in the same currency. 
  
  How to use it: 
  In order to use historical currency translation, you must first set up the exchange rate tables in SAP. This will allow you to enter the exchange rates for each currency you wish to convert. Once the exchange rates are set up, you can then enter the financial statements into SAP and select the currency you wish to convert them into. The system will then automatically convert the financial statements into the desired currency. 
  
  Tips & Tricks: 
  When setting up exchange rate tables in SAP, it is important to make sure that the exchange rates are up-to-date and accurate. This will ensure that the financial statements are accurately converted into the desired currency. Additionally, it is important to make sure that all of the financial statements are entered into SAP before attempting to convert them. 
  
  Related Information: 
  For more information on historical currency translation in SAP, please refer to the official SAP documentation on FI-LC Consolidation. Additionally, there are many online resources available that provide detailed instructions on how to set up and use historical currency translation in SAP.