The Mechanics of Foreign Currency Valuation in SAP S/4HANA

Authors: Satya Venkata Naga Ganesh Nanduri

DOI: https://doi.org/10.37082/IJIRMPS.v13.i5.232755

Short DOI: https://doi.org/g9657j

Country: United States

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Abstract: Globalization has created so many opportunities for organizations such as procuring quality materials from other countries, outsourcing manufacturing process to other geographies where efficient and cost-effective labor is available and selling products worldwide. It results in organizations dealing with multiple currencies for their day-to-day transaction processing. Transacting in foreign currencies has significant impact on company’s financials due to various factors such as fluctuations in exchange rates in global financial markets, hence there are some statutory requirements such as International Accounting Standard 21 that outlines how to account for and translate foreign currency transactions and operations in financial statements to ensure accurate and transparent financial reporting.
SAP S/4HANA offers a robust functionality to deal with foreign currency valuation. This article speaks about importance of foreign currency valuation, how realized and unrealized foreign exchange gains and losses are calculated and recorded and the functionality that SAP S/4HANA Offers to manage end to end solution for foreign currency valuation.

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Paper Id: 232755

Published On: 2025-10-01

Published In: Volume 13, Issue 5, September-October 2025

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