When performing foreign currency valuation for open items (like supplier accounts), the system posts the unrealized exchange rate difference to two types of G/L accounts. The gain or loss is posted to a designated P&L expense or revenue account. The offsetting entry is posted to a balance sheet adjustment account. This adjustment account corrects the collective value of the foreign currency payables on the balance sheet for reporting purposes without altering the underlying supplier reconciliation account. This method ensures the integrity between the subledger and the general ledger is maintained. The entire posting is then reversed on the first day of the subsequent period.

A. Individual supplier accounts with special G/L indicator: Valuation differences are posted in the general ledger, not to individual subledger (supplier) accounts. Special G/L indicators are for other specific transactions like down payments.

B. Alternative reconciliation G/L account: This is used for specific transactions (e.g., down payments) to post to a different reconciliation account than the one in the master record, not for period-end valuation adjustments.

D. Supplier reconciliation G/L account: Direct manual postings to reconciliation accounts are prohibited by default in SAP to ensure the general ledger always matches the total of the subledgers. The adjustment account is used specifically to avoid this.

1. SAP S/4HANA Help Portal

"Perform Foreign Currency Valuation": In the configuration for automatic postings for foreign currency valuation

the documentation specifies the need for a "Balance Sheet Adjustment Account". It states

"For the valuation of open items in G/L accounts

customer accounts

and vendor accounts

you also have to specify a balance sheet adjustment account." This account is used for the offsetting entry for the exchange rate difference. (Accessed under SAP S/4HANA Cloud/On-Premise -> Finance -> General Ledger Accounting -> Periodic Closing -> Foreign Currency Valuation).

2. SAP Learning Hub

Course TS4F02 - Financial Accounting in SAP S/4HANA - Academy Part II: In the unit on "Closing Operations in General Ledger Accounting

" the foreign currency valuation process is detailed. The configuration section explicitly shows the account determination screen (transaction KDF) where a "Bal. sheet adj. acct" is required for open item valuation

confirming that an adjustment account

not the reconciliation account itself

is used for the balance sheet posting. (Refer to Unit 6: Closing Operations in General Ledger Accounting

Lesson: Performing Foreign Currency Valuation).

3. SAP Press

"Financial Accounting with SAP S/4HANA: Business User Guide" (2021)

Chapter 15

Section 15.3.1 "Account Determination": This guide explains the configuration for foreign currency valuation. It clarifies that for open items

"the system posts the valuation difference to a balance sheet adjustment account and an expense or revenue account for exchange rate differences." This directly supports the use of an adjustment account.