Hi Experts,
We are implementing FX Financial instrument for one of our Cline and they want accounting for Swap / Premium amount. Client perform Cash settlement of FX contract at maturity. So there is no actually exchange of Buying and selling currency amount only the gain/loss amount is exchanged at the time of maturity.
Example
Selling Currency – USD – Amount – 1000, Spot Rate USD/INR :- 50 INR, Forward Rate after 3 months – 53 INR Start Date: - 01.01.16, Value Date: - 31.03.16
Buying Currency – INR – Amount: - 53000 at Maturity , Leading currency - USD , Following Currency - INR., Translation ratio 1USD:1INR
Then we have Swap/premium 3INR – (Forward rate – Spot rate) = 3INR
Month End Valuation Accounting
Date: - 31.01.16 (Spot rate of 01.01.16 + 1 INR Premium = 50+1=51) -
Swap/Premium calculation method = (Swap/Premium amount * No of days for which we are valuating transaction from start date) / no of days of transaction.
Spot Rate: - 52 INR (Gain 2000)
Income Receivable – Dr. - 2000
Gain – Cr – 1000
Premium – Cr – 1000
Reset Above account on 01.02.16
Date: - 28.02.16 (Spot rate of 01.01.16 + 2INR premium = 50+2 = 52 INR)
Spot Rate: - 49 Loss = 52 -49 = 3 INR
Exchange Loss – Dr. – 3000
Premium- Cr - 2000
Liability- Cr – 1000
Month end Valuations are reset on next day.
Value Date Accounting
Date: - 31.03.16
Spot rate 54 (Gain = 54-50 = 4 INR
Realized Gain
Bank – Dr - 4000
Gain- Cr – 1000
Premium- Cr- 1000
In case of Realized Loss
Loss – Dr.
Liability – Cr.
Can we map above accounting practice in Standard TRM module. I have used PMP 3500 , step 4 and procedure 1000 in my previous project. Please suggest how can we achieve the above accounting in SAP.
BR,
Rohit