What is currency translation in SAP FIN-CS - S4HANA Financial Consolidation?

SAP Term: currency translation

• Component: FIN-CS

• Component Name: S4HANA Financial Consolidation

• Description: The translation of the local currency of financial statements of foreign consolidation units into the group currency for the reason that consolidation statements are to be created in group currency. The following choices, in particular, must be made when performing currency translation: for the translation of individual financial statement items, you must choose either the current exchange rate which corresponds to the statement date or the average exchange rates. You must choose between alternatives for the treatment of differences that arise during translation.

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• Key Concepts: 
  Currency translation is a process used to convert financial statements from one currency to another. This process is necessary when consolidating financial statements from different countries or regions that use different currencies. In SAP S4HANA Financial Consolidation, currency translation is used to convert the financial statements of subsidiaries into the reporting currency of the parent company. 
  
  How to use it: 
  In SAP S4HANA Financial Consolidation, currency translation is done by using the Currency Translation Tool. This tool allows users to select the source and target currencies, as well as the exchange rate type and date. Once these parameters are set, the tool will automatically convert the financial statements into the target currency. 
  
  Tips & Tricks: 
  When using the Currency Translation Tool, it is important to ensure that the exchange rate type and date are set correctly. This will ensure that the financial statements are accurately converted into the target currency. Additionally, it is important to remember that currency translation should only be used for consolidation purposes and not for reporting purposes. 
  
  Related Information: 
  For more information on currency translation in SAP S4HANA Financial Consolidation, please refer to the official SAP documentation here: https://help.sap.com/viewer/product/SAP_S4HANA_FINANCIAL_CONSOLIDATION/1709%20000/en-US