SAP ABAP IMG Activity BEWPRINZ_DE (Define One-Step Valuation Principles)
Hierarchy
☛ EA-FINSERV (Software Component) SAP Enterprise Extension Financial Services
   ⤷ FIN-FSCM-TRM-TM (Application Component) Transaction Manager
     ⤷ FTAC (Package) R/3 customizing for Treasury money, forex, forward
IMG Activity
ID BEWPRINZ_DE Define One-Step Valuation Principles  
Transaction Code S_ALR_87007838   IMG Activity: BEWPRINZ_DE 
Created on 19981222    
Customizing Attributes BEWPRINZ_DE   Define One-Step Valuation Principles 
Customizing Activity BEWPRINZ_DE   Define One-Step Valuation Principles 
Document
Document Class SIMG   Hypertext: Object Class - Class to which a document belongs.
Document Name BEWPRINZ_DE    

In this activity, you define the One-step valuation principles, that is, valuation principles based on valuation method 1.

The one-step method is primarily used in the Money Market, Foreign Exchange and Derivatives areas.

Write-ups/write-downs, the building/writing back of reserves, and/or representing unrealized gains and losses are performed depending on the total amount in the local currency.

Example

Valuation of a forward exchange transaction USD/DM

  • Transaction basic data:

  • Contract date:    03/01
  • Value date:        05/31
  • Purchase amount: 1,000,000 USD
  • Forward rate:    1.70

  • Rate development of the chosen comparative rate (key date rate) during the term of the transaction:

    Date    Rate DEM/USD

    03/31    1.65

    04/30    1.72

    05/31    1.69

Procedure:

  1. A key date valuation is carried out on 03/31 and 04/30 respectively.

  • Key date valuation as of 03/31:

The result of the comparison of the key date value in the local currency (1,650,000 DEM) with the agreed value of the forward transaction in the local currency (1,700,000 DEM) is an unrealized loss of 50,000 DEM. This is a passive provision.

  • Key date valuation as of 04/31:

The result of the comparison of the key date value in the local currency (1,720,000 DEM) with the agreed value of the forward transaction in the local currency (1,700,000 DEM) is an unrealized gain of 20,000 DEM. The passive provision is written back and an active provision of 20,000 DEM is set up.

  1. The transaction is posted on 05/31
  2. Closing valuation on 05/31 using the 'Realized gain/loss' function.

The transaction was processed at the agreed forward rate of 1.70 DEM/USD. However, the current market rate is 1.69 DEM/USD. This gives a realized loss of 10,000 DEM.

The active provision of 20,000 DEM is written off and the realized gain of 10,000 DEM is posted.

In the Securities area, the one-step valuation method is as follows:

  1. On the due date of the valuation, the book, acquisition and current value are fixed in the position and local currency.
  2. The amounts in the local currency are compared to establish which of the three values will become the new book value (in the local currency). The decision is taken on the basis of the rules defined in the valuation principle for determining valuation gains and losses.
  3. The valuation gain/loss is calculated in the position currency.
  4. The valuation gain/loss multiplied by the old book exchange rate results in the valuation gain/loss in the local currency.
  5. The valuation gain/loss is determined based on changes in the exchange rate:
    1. The new book value in the local currency minus the old book value in the local currency results in the total valuation gain/loss in the local currency.
    2. Total valuation gain/loss in the local currency minus the valuation gain/loss in the local currency results in the valuation gain/loss in the foreign currency (based on changes in the exchange rate).

Standard settings

  • Valuation principle 101

Name: One-step, strict lowest value principle

Valuation method.:        1

Valuation loss:    2 (valuation loss up to key date value)

Valuation gain:    0 (no valuation gain)

  • Valuation principle 102

Name:    One-step, market value

Valuation method.:        1

Valuation loss:    2 (valuation loss up to key date value)

Valuation gain:    4 (valuation gain up to key date value)

  • Valuation principle 103

Name:    One step, diluted lowest value principle

Val.Meth:        1

Valuation loss:    2 (valuation loss up to key date value)

Valuation gain:    2 (valuation gain up to acquisition value)

Activities

  1. Choose Edit -> New entries .
  2. Enter a unique indicator and a name for the valuation principle.
  3. By double-clicking the valuation principle, you can access the detail view.
  4. Define the rules for determining valuation gains and losses, according to which valuation is performed.

You could, for example, set up your system so that

  • valuation losses are permitted up to the key date value and
  • no valuation gains are permitted.
Business Attributes
ASAP Roadmap ID 204   Establish Functions and Processes 
Mandatory / Optional 1   Mandatory activity 
Critical / Non-Critical 1   Critical 
Country-Dependency A   Valid for all countries 
Assigned Application Components
Documentation Object Class Documentation Object Name Current line number Application Component Application Component Name
SIMG BEWPRINZ_DE 0 HLA0100081 Accounting 
Maintenance Objects
Maintenance object type C   Customizing Object 
Assigned objects
Customizing Object Object Type Transaction Code Sub-object Do not Summarize Skip Subset Dialog Box Description for multiple selections
V_TZRPRN V - View SM30 0000000003  
History
Last changed by/on SAP  20040210 
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