Hi Treasury experts.
My client has recently upgraded from 4.6C to ECC6. They used a Treasury consultant for the upgrade, but he is now unavailable, so they have asked me (FI-CO consultant, with no treasury background) to look at some issues they are having with paostings from treasury. I've managed to fix some account assignment issues but I am a bit stuck on the following one:
The client has a loan in a foreign currency, which has been in place for a number of years. It moves up and down regularly. Each month, they run transaction TBB1. A Forex Loss (in Local Currency) is regularly posted, via Update Type DBT_B008. I imagine that, given different exchange rate movements, DBT_B006 would also post a gain, if appropriate, but that has not occurred since the upgrade.
A typical example is that a Borrowing Decrease (update type MM1110) of NZD2,000,000 gave rise to a Forex Loss (DBT_B008) of AUD73,000. I am trying to understand a couple of things:
1. What is the purpose of the DBT_B008 posting and how is the loss calculated? I imagine that it is based on the current exchange rate, at the time of the transaction, compared with the average exchange rate embodied in the account balance, that has accumulated over a number of years. Is this correct? I have attempted to verify this calculation externally but have not been successful.
2. The G/L account for the Loan is an open-item-managed account. Each time there is a movement up or down in the G/L account (representing a borrowing increase or decrease), that movement is manually cleared against the balance in the account, leaving a residual. This clearing transaction also creates exchange gain/loss postings in the Local currency. If we already have G/L transactions flowing from DBT_B008/DBT_B006 update types, is this double-counting?
Thanks in advance for your advice,
Marc Huggins