Correction of valuation for FX Forward Contracts

    Current State / As Is Process:

    Accounting will run TPM18, and during this process SAP currently values our FX hedging forward contracts off of the contract date (rate from the TCURR table), which is incorrect. For example, if the business entered into a forward contract on April 1 (contract date), and the contract settled on May 30 (settlement/valuation date), instead of SAP picking up the rate as of May 30 from the TCURR table and using that to record the realize gain or loss, SAP is using the contract date of April 1 and using that rate from the TCURR table, which in turn records an incorrect gain/loss and has to be manually adjusted.

    Future Proposed Process:

    SAP needs to use the settlement/valuation date when valuing our FX hedging forward contracts. If the settlement/valuation date is used, then the gain/loss calculated and recorded should equal that of the counterparty, as well as the gain/loss calculated by Treasury, eliminating the need for a manual correcting entry.

    • Create a FX Forward transaction
    • Settle
    • Approve through workflow
    • Post through TBB1
    • Run TPM18
    • Validate that SAP has correctly calculated the realized gain/loss, based on the rate from the settlement/valuation date, and this amount should tie to Treasury’s calculation, as well as the counterparty’s confirmed gain/loss.

    Please guide me above BRD..


    Thanks,  in Advance!


    Default Asked on September 5, 2018 in Financial Management.
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