Forex valuation of accruals

[former_member583013]

Hi friends,

We are implementing TRM in ECC600 SP17.We use differential accrual procedure, and not reset procedure.

The valuation steps has only FX valuation for the Interest rate instrument.

We book the accruals at month end with TBB4, and not TPM44. After booking the accruals, when i do TPM1 to evaluate the position, it just valuates the nominal and not the differential accruals posted earlier.

Questions:

1. What was the change in TPM44 from TBB4?

2. Any idea why TPM1 doesnot pick the accrual flows? In that case we have to do the FX valuation of the accruals from the ledger in FI. This is slightly inconsistent, as we evaluate deals in TRM and accruals in FI.

Best Regards!

Sandip

[former_member583013]

Thanks to everyone for answering in detail about TPM44 and limitations / workarounds with TBB4.

[Former Member]

Hi Sandip,

For your 1st question, since you are using ECC 6 version, TBB4 is used for all the money market accrual/deferal function, wheras from ECC 6 EhP3 release onwards, TBB4 function is obsolete and TPM44 is single entirity for all treasury accrual accross any product category.

TPM1 is used for position evaulation against different valuation critieria. If you want to evaluate your TBB4 accruals with TPM1, you may have to set accrual flows relevant to position change (capitalization). But I am not clear why you want this functionality which is different from standard practice.

Regards

Prasad AV

[former_member583013]

Hi Prasad,

Thanks for your reply.

I do not know how to do FX valuation of Accruals in standard, in ECC600. TPM44 directly does it, so we don't need to consider it in TPM1. But TBB4, is not doing forex valuation.

It will be good if you can tell the standard way.

Best Regards!

Sandip

[Former Member]

Hi,

In TPM44, in customizing, you have an option to define update types for adjustment posting, forex write up and write down flows which will be generated when there is change in the exchange rates between previous and current accruals when you are using difference procedure.

However, in TBB4 you may not be able to customize it for posting the differences in local currency. However on the last day of the interest posting, in order to balance the amount of the interest payable and the interest posting in local currency, please check the modifications as indicated in the notes: 949817 & 1031978.

Regards,

Ravi

[lorenz_sperl]

Hi,

...just one information regarding the posting-logic: as SAP only has 1 component for accruals (no split into "title" and "fx") they suggest not to post the FX-accruals differently than the Title-accruals for OTCs.

Regards,

Lorenz