What is Currency type in SAP and how its use in SAP

Currencies in SAP are used to express a transaction in monetary terms. SAP provides various options to manage currency type that you want to use while recording a transaction in to the Financial Accounting module.

Currency type used in a company code is called local currency in SAP and all other currencies are called foreign currencies. When SAP finds a document posted in foreign currencies it automatically translate it to local currency in SAP.

To get it translated from foreign currencies to local in SAP a translation ratio table and exchange rate table has been maintained in SAP. The currencies are defined in SAP for recording a transaction. Whenever you define a controlling area and company code, system will ask you to set your preferred currencies.

Currency type and its use in SAP - difference between Company Code, Group and Hard currency

Below are type of currencies that are used in SAP FICO;

  1. Company Code Currency
  2. Group and Hard Currency

What is Company code currency in SAP

Used for external reporting requirements in a company.

What is Group Currency in SAP

Its used for consolidation purpose in SAP so that all the company code currencies value under that group can be reported in one.

What is Hard Currency in SAP

Its country specific and used for country specific requirements like reporting.

When you create a financial statement, you have to carry out foreign currency valuation process.

The selection of controlling area currency does not have any impact on SAP profitability analysis if you have selected it in CO-PA as independent of controlling area currencies. In Accounting based CO-PA data always updated in controlling area , company code and transaction currency where as in costing based CO-PA, you can update it in operating area and the company code currency.

Tables used in Currencies


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Editorial Staff at Yourfinancebook is a team of finance professionals. The team has more than a decade experience in taxation and personal finance.