Question

You need to use foreign currency valuation in the ledger solution. Which objects must you define in Customizing?

a) Company codes
b) Asset classes
c) Depreciation areas
d) Valuation methods

Answer 1

In Customizing for foreign currency valuation in a ledger system, company codes, depreciation areas, and valuation methods must be defined. These objects ensure that the valuation is performed accurately and complies with accounting standards.

Step-by-step explanation:

When setting up foreign currency valuation in a ledger system, there are specific objects that must be defined in Customizing to ensure accurate and compliant financial reporting. These objects include:

• Company codes: It's essential to define the company codes as these are the primary organizational units for which you plan to perform valuations. Each company code represents an independent accounting entity.
• Depreciation areas: These must be set up if the valuation involves fixed assets. Depreciation areas represent different ways in which the asset values are assessed and managed.
• Valuation methods: You need to determine the valuation methods that will be used to calculate exchange rate differences. Valuation methods include parameters for defining how currency valuation should be executed.

Defining these objects correctly allows the ledger solution to handle foreign currency transaction reporting and valuation in line with international accounting standards.