Each company code can have two additional currency is addition to the company code currency entered to the company code data. The currency entered in company code creation will be called local and the other two additional currencies are called parallel currencies.
It’s defined with transaction code OB22 or by using path;
SPRO > Financial Accounting > Financial Accounting Global Settings > Company Code > Define additional local currencies
Click on new entries
- 1st local currency: automatically picked up from the company code data
- 2nd and 3rd local curr: used to define the additional currencies
- You define it either group/hard/index based/global currencies
- In exchange rate type you define how to do valuation for it
- In the source field you define the base currency
- The transaction date type defines which date will be considered as base i.e. document date, posting date or translation date.
It is used in cross company code posting. Company codes that use different company code currencies are posted to controlling by using group currency. These group currencies are stored in table T000.
It is used in countries with high inflation. It allows better valuation in case of inflationary environment.
Index Based Currency
It is used in statutory reporting of those subsidiaries which under go high inflation.
Global Company currency
It is used for legal consolidation. Different company code with different currencies can be consolidated and linked to one company that uses it.