3575300 - Bank Accounts in Foreign Currency With a Balance of 0.00 Are Evaluated in Foreign Currency Remeasurement For Cash

You maintain bank accounts or petty cash in foreign currency. 
Bank Account ID XYZ at the moment shows a balance of 0.00. 
Nevertheless, when running the Foreign Currency Remeasurement For Cash a Gain or Loss is computed and posted for this bank account and associated transit account(s).
Your expectation is that for a cash location with zero Balance Amount no gains or losses should result from Foreign Currency Remeasurement. 

SAP Business ByDesign

1. Go to Payment Management work center.
2. Go to Foreign Currency Remeasurement Runs view.
3. Open the relevant run.
4. Go to Remeasured Balances tab.
5. Refer to G/L Account 12345 and see that there is either a Gain or Loss being posted.

Bank G/L Account 12345 is associated with Bank Account XYZ.

This typically occurs when applied Foreign Currency Remeasurement Method implies Reversal Postings. In other words, realized gain/loss in period N is reversed on the first day of subsequent period N+1 and effectively periodically posted gains/losses are carried over in Company Currency.

We illustrate applied logic with the following simplified example:

100,000 USD are lodged on Bank Account ID XYZ (g/l account 12345) on 01/01/2024 at an Exchange Rate 0.9178 EUR/USD and allocated against G/L Account. 
Over subsequent months the balance of 100,000 USD is evaluated against applied Key Date Exchange Rate resulting in Gains/Losses realized at the end of each month.

According to Fine Tuning settings for applied Foreign Currency Remeasurement Method, realized Gain/Loss is reversed at the first day of subsequent period. 

• Go to the Business Configuration work center.
• Enter the Fine Tuning activity Foreign Currency Remeasurement Methods for Cash.
• Select option Assign remeasurement Method to Accounting Principle.
• Choose the Accounting Principle 7000. Open the Use for Cash tab.
• Box No Subsequent Reversal Posting is not selected.

Hence balance in Company Currency (EUR) on 01/08/2024 is 91,780.00 EUR.

On 02/08/2024 an outgoing bank transfer over -100,000 USD at exchange rate 0.9236 EUR/USD brings the balance in Transaction Currency to 0.00 USD and the balance in Company Currency (EUR) to -580.00 EUR respectively. 

• Every subsequent Foreign Currency Remeasurement Run will compare the  Key Date Valuation Amount to the Historic Valuation Amount.
• On 31/08/2024 Balance Amount 0.00 USD * Key Date Exchange Rate 0.9041 EUR/USD = Key Date Valuation Amount 0.00 EUR. 
• The Historic Valuation Amount = -580.00 EUR. 
• Gain/Loss = Key Date Valuation Amount (0.00 EUR) - Historic Valuation Amount (-580.00 EUR) = 580.00 EUR; to be reversed on 01/09/2024.
• In other words: At any Key Date Exchange Rate previously realized Gain/Loss will effectively carry over in the next period.

In order to not make Bank Account ID XYZ (Bank G/L Account: 12345) subject to Foreign Currency Remeasurement is to bring the balance in Company Currency (EUR) to 0.00 sustainably - In other words: The Historic Valuation Amount to 0.00.

This globally could be achieved by setting the 'No Subsequent Reversal Posting'-Indicator in Fine Tuning activity: Foreign Currency Remeasurement Methods for Cash / Assign remeasurement Method to Accounting Principle.

This, however, would then apply to all cash-locations and remeasurements according to Accounting Principles linked to relevant Set of Books. 

The correct way to conclude a particular bank account in Foreign Currency is to bring the Balance in Company Currency to 0.00 by posting a Manual Journal Entry Voucher for Cash. 

For a suitable current open period starting with 010/2024 the following entry could be entered.

(In case g/l account Exchange Rate Differences (Remeasurement)  is not available for manual postings; the posting block would have to be removed under Chart of Accounts in the Business Configuration). 

As a result the bank account balance remains 0.00 USD - reflected as 0.00 EUR in Company Currency. A subsequent Foreign Currency Remeasurement Run will not pick up any balances. 

We would suggest to ideally test this approach in your test-system first.

 1920954 - Reversal Postings after Running the Foreign Currency Remeasurement Run for Cash

KBA , SRD-FIN-CLM , Cash and Liquity Managment , Problem