SAP ABAP IMG Activity TRGV_AM_PROC (Define Amortization Procedure)

Hierarchy

☛ EA-FINSERV (Software Component) SAP Enterprise Extension Financial Services
   ⤷ FIN-FSCM-TRM-TM (Application Component) Transaction Manager
     ⤷ FTR_GENERAL (Package) CFM TM: Application Basis / Global Objects

IMG Activity

ID	TRGV_AM_PROC	Define Amortization Procedure
Transaction Code	S_KFM_86000170	(empty)
Created on	20000728
Customizing Attributes	TRGV_AM_PROC	Define Amortization Procedure
Customizing Activity	TRGV_AM_PROC	Define Amortization Procedure

Document

Document Class	SIMG	Hypertext: Object Class - Class to which a document belongs.
Document Name	TRGV_AM_PROC

In this IMG activity you define amortization procedures.

Use

In this IMG activity, you define the different valuation steps that are taken when changing positions, transferring postings and valuating key dates. Once you have defined each valuation step, you must make settings in the following IMG activities in order to assign valuation steps to each position so that the resulting flows can be posted correctly.

1. Assign valuation steps to the position management procedures and determine the sequence in which they should be carried out for position changes and key date valuations under Parallel Valuation Areas -> Settings for Position Management ->Define Position Management Procedure.
2. Define the rules for assigning position management procedures to positions under Parallel Valuation Areas -> Settings for Position Management ->Assign Position Management Procedure.
3. Assign the required update types for each position management procedure under Parallel Valuation Areas -> Key Date Valuation -> Assign Update Types for Valuation. Different tab pages are used for assigning in each step of the valuation. Depending on which valuation steps have been assigned to a position management procedure,
• some tab pages will be filled or not filled. If no amortization is required in a position management procedure for example, no update type needs to be assigned on the amortization tab page.
• not all fields of a tab page have to be filled. If, for example, you want to manage the Deferral item for purchase value component in the amortization procedure, the required update types must be assigned. If you do not want to manage this component, update types do not have to be assigned.

  Notes:

• Update types must first have been created in the Define Update Types IMG activity and assigned to Key Date Valuation under Define Update Types and Assign Usages.
• You must define posting types under Parallel Valuation Areas -> Link to Other Accounting Components -> Define Account Determination for update types that are relevant for posting.
4. Assign the required update types for each position management procedure under Parallel Valuation Areas -> Derived Business Transactions ->Assign Update Types for Derived Business Transactions. Assignment is carried out on different tab pages. Depending on which valuation steps have been assigned to a position management procedure,
• some tab pages will be filled or not filled. If no amortization is required in a position management procedure, no update type needs to be assigned on the amortization tab page.
• not all fields of a tab page have to be filled. If, for example, you want to manage the Deferral item for purchase value component in the amortization procedure, the required update types must be assigned. Due to the fact that derived business transactions are additionally used for updating position components, the following tab pages must also be assigned for managing the Deferral item for purchase value component:
- Inflows
- Amortizations
- Transfers
- Pos. Outflows
- Reconciliation flows
- Currency swap
If you do not want to manage the Deferral item for purchase value component, update types do not have to be assigned.

Notes:

• Update types must first have been created in the Define Update Types IMG activity and assigned to Derived Business Transactions under Define Update Types and Assign Usages.
• You must define posting types under Parallel Valuation Areas -> Link to Other Accounting Components -> Define Account Determination for update types that are relevant for posting.

Activities

1. Choose New Entries.
2. Name the procedure and enter a description.
3. Define the Calculation Category [Scientific Amortized Costs (SAC), Linear Amortized Costs (LAC) or ISSUE SPREAD].
   Note:If you select the 'issue spread' calculation category, you must set the net indicator.
4. Set the gross/net indicator.
1. Net
   In the case of the net procedure the position is posted along with its acquisition value (book value = acquisition value) and then amortized over the remaining term
   (book value = acquisition value + amortization).
2. Net; Net; Separate Balance Sheet Accounts for Amortization
   Negative and positive amortizations for a position resulting from changes to the position, transfer postings and key date valuations are posted to separate accounts in Financial Accounting.
   Note: You have to enter the relevant account assignment determination for update types for positive and negative amortizations.
   After posting the amortizations, the balance of both accounts is automatically compared. If both accounts show a balance for this position, the account with the lower balance is cleared by an adjustment flow.
3. Gross
   In the gross procedure, the premium/discount is posted as an accrued/deferred asset or liability and written off, affecting net income, over the term of the amortization.
4. Gross; Premium/Discount Not Included in Book Value:
   If you set this indicator, the system determines the book value of the position from the total of the amortized acquisition value and valuations - as for the net procedure. The premium/discount is nevertheless posted on purchase and written off, affecting net income, over time.
5. Gross; Separate Balance Sheet Accounts for Accruals/Deferrals:
   In the case of the gross procedure of amortization, you can manage separate accounts in accounting for accruals/deferrals, depending on whether premium or discount. Note that only one of the accruals/ deferrals accounts of a position can show a balance other than zero. The accrued/deferred assets can only show balances on the debit side. The accrued/deferred liabilities show balances on the credit side. These requirements are taken into account with this setting in which corresponding adjustment flows are generated.
5. Enter the time up to which amortization should be carried out:
1. Amortization up to end of term/end of fixed interest rate period
2. Amortization on next date of issuer giving notice
3. Amortization up to end of fixed interest period
4. Amortization up to notice date/end of fixed interest period
6. Set the Additional Components indicator for managing other Position Components.
• Initial
No additional components are managed.
• Deferral Item, Purchase Value
  The position component deferral item, purchase value is also managed.
• ISSUE SPREAD linear
• ISSUE SPREAD exponential
7. You define how interest is included in the amortization using the Include Interest indicator.
8. Treatment of Effective Interest Rate:
   You can use this to control how calculating the effective interest rate determines the amortized acquisition value. The basis for calculating the effective interest rate is a cash flow.
   In the case of this cash flow, the amortized acquisition value of the last amortization or the date of the last position change (for example, purchase) forms the start value. Based on this, the new cash flow is generated from the conditions and/or redemption schedules.
9. Reset is Possible
   If you set this indicator, the generated amortization flows as well as the remaining flow steps are reset for mid-year valuations with reset.
10. Month-End Start Date:
    If amortization takes place according to the LAC procedure, the system automatically sets the month-end indicator for your start date.
11. Month-End End Date:
    If amortization takes place according to the LAC procedure, the system automatically sets the month-end indicator for your end date.
12. Cut SAC Amortization:
    If you amortize a position according to the SAC procedure, the amortized acquisition value can, if required, exceed or fall below the nominal amount. This also applies if you have purchased the position below or above par. This indicator controls whether the amortization should be shortened in this case.
13. Amortization for Installment Repayments:
    If you set this indicator, a derived business transaction is generated for every installment repayment according to the settings in position management (this applies particularly to amortization).

Further notes

For more information, refer to the SAP Library under Transaction Manager -> Money Market/Foreign Exchange/Securities/Derivatives -> Accounting -> Functions in the Parallel Valuation Areas -> Valuation.

Requirements

Standard settings

Activities

Example

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	TRGV_AM_PROC	0	KFM0000011 O HLA0100101

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
TRGV_AM_PROC	V - View	SM30		☐	☐

History

Last changed by/on	SAP	20000912
SAP Release Created in	462_10