SAP Financial Accounting (SAP FI) Practice Exam

How do we determine the specific accounts to post for FCV?

1. By company code and fiscal year

2. By chart of accounts, GL account, currency, and currency type

3. By account type and account number

4. By reporting period and ledger type

The correct answer is: By chart of accounts, GL account, currency, and currency type

The determination of specific accounts for Foreign Currency Valuation (FCV) in SAP Financial Accounting primarily relies on a combination of the chart of accounts, general ledger (GL) account, currency, and currency type. This is crucial because FCV involves translating the values of transactions denominated in foreign currencies into the local currency at the end of a reporting period for accurate financial reporting. Each GL account can be designated for specific currency types (like local currency, transaction currency, etc.), and these designations influence how the valuation is handled. The chart of accounts and the GL account ensure that the valuation postings are made to the correct financial statement line items, aligning with both accounting policies and organizational structure. Moreover, handling different currencies—which may have different valuation methodologies—requires that these factors be precisely defined to ensure compliance and accurate financial reporting. The other options describe various dimensions of accounting and reporting that do not specifically address the nuances required for establishing FCV accounts. Company codes and fiscal years relate to organizational structures and time frameworks but do not inherently determine valuation. Similarly, account types and numbers, alongside reporting periods and ledger types, are important in their own contexts, but they do not encapsulate the full requirements necessary for defining accounts specifically for foreign currency valuation.