3586326 - Reversed supplier open items are valuated in Advanced Foreign Currency Valuation

During the execution of Advanced foreign currency valuation for a specific company code, it is observed that a line item of a particular supplier invoice document was included in the revaluation, despite the document being reversed/cancelled on the MM side.

SAP S/4HANA Cloud Public Edition 

1. Run the Advance Foreign Currency Valuation with the specified key date & chosen company code using app 'Schedule General Ledger Jobs' F1927.
2. Observe that the reversed/cancelled journal entry item is included in the results of the Advanced Foreign Currency Valuation job. 
3. Confirm that the journal entry involved is reversed/cancelled on the MM side. 

This behaviour is expected since the invoice involved is not actually cleared on the FI side, despite being reversed/cancelled on the MM side. This is not a true reversal from the FI point of view. 

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Scenario 1 :: Journal entries posted in FI module only

Consider first journal entries posted in the FI module only. The journal entry is created with app Create Incoming Invoices (app ID FB60) and reversed with a separate journal entry in app Manage Journal Entries (app ID F0717A) using the Reverse function. This scenario is a true reversal as the original supplier journal entry invoice is cleared by the reversal journal entry directly. Where this reversal takes place prior to the valuation, this invoice and reversal will not be valuated by advanced foreign currency valuation as the items are not open at the time of processing. 

Sequence of postings: 

1. FI invoice posted
2. FI invoice reversal posted which clears both open items from line items below
3. Advanced foreign currency valuation is carried out

In this scenario, if the advanced foreign currency valuation is carried out after the reversal, the above invoice will not be valuated. 

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Scenario 2 :: Journal entries posted from MM-IV & reversed without clearing

Consider the scenario where MM invoice postings are made and reversed and no clearing activities are carried out on the postings on the FI side. 

Sequence of postings: 

1. MM-IV invoice posted on MM side resulting in a journal entry on the FI side
2. MM-IV reversal posted on the MM side which results in a separate journal entry on the FI side (no clearing takes place on the FI side so not a true reversal)
3. Advanced foreign currency valuation is carried out
4. Clearing activities take place on the FI side

In this scenario after step 3 above, if the advanced foreign currency valuation is carried out after the reversal (not a true reversal), the above invoice will be valuated. 

As mentioned this scenario is not a true reversal since on the FI side, the two items do not reverse each other or clear each others line items. This means that the supplier invoice item on the FI side, ie. 5100000070 appears as an open item still and therefore will be subject to inclusion in the advanced foreign currency valuation run. This can be checked in the 'schedule general ledger jobs' log.  

Also note that typically when an invoice is reversed/cancelled on the MM side, afterwards it is necessary to run a clearing process on the FI side in order to clear the two items against each other using for example app 'Clear Outgoing Payments' [F1367] -> Clear Open Items). 

It should be noted however that cleared invoices can be processed by the advanced foreign currency valuation process in terms of statistical postings, please see the following blog here for details and examples. 

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Scenario 3 :: Journal entries posted from MM-IV & reversed with clearing

Consider the scenario where MM invoice postings are made and reversed and subsequent clearing activities are carried out on the postings on the FI side. 

Sequence of postings: 

1. MM-IV invoice posted on MM side resulting in a journal entry on the FI side
2. MM-IV reversal posted on the MM side which results in a separate journal entry on the FI side (no clearing takes place on the FI side so not a true reversal)
3. Clearing activities take place on the FI side
4. Advanced foreign currency valuation is carried out

In this scenario after step 4 above, if the advanced foreign currency valuation is carried out after the reversal & clearing of open items, the above invoice will not be valuated. 

There is no resolution necessary. The advanced foreign currency valuation run will valuate invoices which are cancelled on the MM side but still appearing as open items on the FI side. The advanced foreign currency valuation process is operating as it should. 

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