Answer / satish kumar gunda

HI, Lets suppose you had a Business Transaction with
Business Partner Customer/Vendor in currrency other than
your company code. ex. USD or EUR etc... where as your
company code corrency is INR... In this case there will be
some payment term assigned to Vendor and hence an invoice
gets due after couple of days after an invoice is posted..
meanwhile there will be fluctions in the currency
conversion.. and the due amount to the Vendor may be less
or high based on the currency market. in order to track
this fluctuation in accounts we valuate the currency. that
is nothing but foreign currency valuation.

Satish Kumar Gunda

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