System Uses Historical Amounts in Local Currency During Clearing Posting and Clearing

If you select the Only balances in local crcy indicator in a G/L master record, the system uses the historical amount in local currency when you clear open items. This means that all amounts - even if they are posted in foreign currency - are recorded as if they were posted in local currency. When clearing open items, the system processes all amounts as if they were posted in local currency. Accounting for foreign currency open items in this way lets you set up special clearing accounts in the G/L accounts area. For example, clearing accounts for goods receipts and invoice receipts can be set up so that items are only posted manually to these accounts and the goods receipts are always posted in local currency. If their amounts always correspond in local currency, you will be able to clear the goods receipts and invoice receipts without having to make any adjusting entries.

You have accounts with open items in local currency as well as different foreign currencies. You clear all open items using the local currency.

On 01/01/1995, you posted an incoming invoice in both German marks and US dollars, 1000 DEM and 580 USD respectively. On 01/23/1995, the exchange rate increases from .58 to .63 USD per DEM. You post the goods receipt, however, in US dollars for 580 USD. When you match and clear these items, the system does not retranslate the amount for 1000 DEM, but uses the historical amount of 580 USD.

Transaction	Foreign currency	Rate	Local Currency	Clearing amnt
01/01/95: Invoice	1000 DEM	.58	580 USD	580 USD
01/23/95: Goods receipt		.63		580 USD

You can clear the items without having to make any further adjustment postings.

If the Only balances in local crcy indicator is suppressed from the screens for G/L account master data maintenance, you will have to set it in Customizing so that the system displays it. To do this, execute the activity Define screen layout per activity (G/L accounts) in Customizing for General Ledger Accounting. On the next screen, select the desired activity (display, create, change), and choose Edit field status. Then choose the Account control group and set the Only balances in local crcy indicator as an optional entry.