1. Group Currency: You define Group Currency when you define Client (SCC4) 2. Global Company Currency: You define Global Company Currency when you define Company that is assigned to your company code.
3. Hard Currency: YOU define Hard Currency when YOU define the Country that your Company code assigned to. A hard currency is used in countries with high inflation.
4. Index-Based Currency: You define IB Currency when You define Country that your company code assigned to. An index-based currency is stipulated for external reporting (for example, tax returns), in some countries with high inflation.
5. company code Currency: You define the company code Currency when you define Company Code.
Now with this 5 types of Currency, you can maintain a Parallel Currency in your system under the SPRO – Multiple Currency. SAP give you to maintain 3 Parallel Currencies, it means when you post a transaction using Trans Currency, system will convert to the others curr that you set in this setting.
By DEFAULT 1st LC SAP will take the company code Currency as your 1st LC.
2nd LC: you can choose 1 of 5 from the Currency. Type. Ex: Hard Currency
3rd LC: you can choose 1 of 5 from the Currency Type. Ex: Group Currency
Your company in Singapore, so your company code Currency is Sing$.
Your company wants to have Double Book Keeping, delevered FS in Sing$ and also in HK$, so you maintain HK$ in Hard Currency.
Your company have a Consolidation with the HQ in US, so you maintain US$ in Group Currency.
Then after you define your all the Currency types, you fill this / setting this in the 2nd and 3rd LC on your Parallel Currency.
SAP only give 3 Currency to maintain in Parallel Currency, let say your company need to generate FS in 10 different Currency for Go Public in many different country, then you have to maintain all the other Currency in the Special Purpose Ledger, to capture your requirement.
Please note that when you use 2nd and 3rd LC as your Parallel Currency, its means you will have 3 set Books of FS, so at THE END of the MONTH you have to revaluate all your Currency Type: 10 LC, 20 HC and 30 GC. Because its looks like you have 3 different FS in multiple currencies.
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