How does ICMR handle multi-currency transactions?

• A. By consolidating all currencies into USD
• B. By implementing currency conversion and tracking
• C. By converting transactions manually
• D. By limiting transactions to a single currency

Answer: (B)

In the context of SAP Intercompany Matching and Reconciliation (ICMR), handling multi-currency transactions is essential for ensuring accurate financial reporting and reconciliation across different entities. The correct approach involves implementing currency conversion and tracking.

This method allows the system to automatically convert transaction amounts from one currency to another using predefined exchange rates. It ensures that all transactions are appropriately reflected in a common reporting currency, thus facilitating effective comparison and reconciliation of intercompany transactions. By tracking the currency exchange rates, the system can manage the fluctuations in currency values over time, providing accurate and timely financial information.

This functionality helps organizations maintain compliance with accounting standards and provides a clear view of financial performance across multiple currencies, which is crucial for multinational companies engaged in intercompany activities.