The following foreign currency valuation procedures depend on international (IFRS) and local (GAAP or HGB) valuation principles:
- Always Evaluate: The items to be valuated have to be reported in the balance sheet with the exchange rate of the current valuation date, no matter if that will mean valuation profits or valuation losses.
- Lowest Value Principle: Liabilities will only be valuated with the current exchange rate if the valuated amount will be higher than it was at the posting date.
- Strict Lowest Value Principle: The valuation is only displayed, if the valuation amount on the key date is less than the purchase value in the case of a receivable, and is greater than the purchase value in the case of a payable.
The foreign currency valuation run needs a valuation variant (flexible method assignment) or a valuation method (fixed method assignment).
The valuation method defines, with which valuation procedure the valuation is carried out.
The valuation area defines the valuation approach: account approach or ledger approach.
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