TPM18/EBS for Foreign Exchange producty

[Former Member]

Dear All,

I have an issue with fx product type, initially realized gain or loss was calculated from EBs upload meaning that

the flag Trans to LC was ticked in the forex attributes for this product. Since reconciling from EBS was very

time consuming, we now decided to use a new product which will generate profit or loss with TPM18.

Issue:

We use daily rates,so basically when we have a contract with contract date 25.05.2011 value date say 01.06.2011,

we usually run TBB1 on 30.05.2011, at this point TBB1 posts the flows with the rate available on 30.05.2011.

So now I run TPM18 the system partially posts a loss here and the rest is posted from EBS upload.

The main problem here is that the OBA1 config goes to different GL account and TPM18 goes to a different GL account.

resulting in two different entries for the same contract to two different gl accounts.

How can I get TPM18 to get the whole valuation done and prevent EBS from posting any realized gain or loss?

Thanks in advance for your advice

Rgds

SG

[Former Member]

Hi ,

Based on the requirements , Kindly clarify , for FX contract as per the requirement mentioned the contract is starting on 25.05.2011 and the contact value date is : 01.06.2011 how it will be possible to post using TBB1 on 30.05.2011 ,since the position is available to be posted on 01.06.2011 , further TPM18 is for posting relaized loas/ gain , hence in case of FX contract the value date will be date on which the gain and loss can evaluated .or the contract end date . Kindly check and confirm the requirement .

[Former Member]

Hi,

Thank you for your reply,

We run TBB1 on 30 th for 01.06.2011, in this way it picks up the positions to be exercised on 01.06.2011 We do this so we can prepare the payments one day in advance (I am actually rethinking on this process), but then since we have no rates for the 1st of June, it picks up

the date available for the 30th. Now I definitely have a mismatch here between the real value date and the TBB1 value date. Disaster!

I have a kind of a work around for this, but it effects the initial design itself. Therefore I wanted to get a second opinion.

Hope I am clear if not I can very well provide some examples?

Thank you

Rgds

SG

[Former Member]

Hi ,

As per the statement u in TBB1 u r posting date is 30.05.2011 , but ur due date is 01.06.2011, ok fine so can u provide me an example so u can very well maintain the rate for June month also , if u dont have the rate now u want it to do it aftewwards u can very opt for TPM1 where u can post the foreign currency valuation with rest and once u get the rate u can post the Relalized gain /loss.

[lorenz_sperl]

Hi,

...this "disaster" is well known for years

Coming with EhP5, you can pay w/o having posted. If you manage to get exactly the same FX-rates the bank uses into your system - congratulations!

In real world, you hardly have 1:1 FX-rates compared to your bank(s). So, to some extent you cannot avoide creating FX-P/L due to a mismatch in FX-rates.

Regards,

Lorenz

[Former Member]

Hi,

Thanks for your reply, well if is a know issue then...very unfortunate, but ofcourse since business goes on as usual, I am forced to find a work around here. I will look into the EPH5 though

Anyway just want demonstrate my scenario here,

For instance I get into a forward contract with the Bank on 25.05.2011 until 28.05.2011 (I m not going to use any forward points, in order to keep it really simple)

, say BUY 1000 EUR : SELL 1400 USD,T and the rate is 1.38 on 28.05.2011. But when I post TBB1 say on the 26th in order to prepare the payments two days in advance the rate is 1.35 therefore this is my Journal entry.

For USD : Dt FX A/C, Cr. Tr clrng A/C 1400 USD

For EUR : Dt Bank trn A/C, Cr. FX A/C 1000 EUR -> 1350 USD

So now when I upload my bank statement on the 29th (for value date 28th where the rate in TCURR is 1.38)

For EUR: Cr Bank Tr A/C, Dt Bank A/C 1000 EUR -> 1380

Clearing Reval is USD 30 (which is posted to P/L)

now when I run TPM18 at month end, the rest of the difference is posted. Well my issue was that I wanted all the revaluation to be done via TPM18 and nothing from EBS, but obviously looking at the way our exchange rates are maintained, this was not feasible.

End of the day, I solved this issue using a work around.

Thank you all for your replies

Regards

Sharath