What is index-based currency in SAP SRD-FIN - FIN-Financials?

SAP Term: index-based currency

• Component: SRD-FIN

• Component Name: FIN-Financials

• Description: A currency rate that is used for reporting purposes in countries with very high inflation.

Smart SAP Assistant

• Key Concepts: 
  Index-based currency is a feature of SAP Financials that allows users to define a currency as an index-based currency. This means that the currency is not tied to a specific exchange rate, but instead is based on an index such as the Euro or the US Dollar. This allows users to more accurately track their financials in different currencies. 
  
  How to use it: 
  To use index-based currency in SAP Financials, users must first define the currency as an index-based currency. This can be done in the Currency Master Data screen. Once the currency is defined, users can then enter transactions in that currency and the system will automatically calculate the exchange rate based on the index. 
  
  Tips & Tricks: 
  When using index-based currencies, it is important to remember that the exchange rate will fluctuate with the index. Therefore, it is important to keep an eye on the index and adjust transactions accordingly. Additionally, it is important to remember that index-based currencies are not tied to a specific exchange rate and therefore may not be suitable for all transactions. 
  
  Related Information: 
  For more information on index-based currencies in SAP Financials, please refer to the SAP Help documentation or contact your local SAP support team.