Bonds configuration

[former_member1191191]

Hi Experts,

I have configured Fixed Interest Bonds in our system.

Accounting standard says that amortized cost is computed by discounting all future cash flows at market rate of interest/effective rate of interest and recognized over the term of the instrument.

Have selected PMP 9984-IAS/HTM: Amort. SAC Net / FX Val. Only (P/L) as client is following Held to maturity or Amortization approach for accounting.

1. Wanted to understand if Accruals (TPM44) or Valuation Run (TPM1) needs to be done. Can both be done ? or they are exclusive? If I use TPM44 it is accruing the coupon amount over the period and if I am using TPM1 it is amortizing the purchase cost over the period. But it should be Coupon amount - accrued interest - Premium paid for the Bond - Stamp Duty/additional charges if any. What is to be done?

2. PMP method changes will effect TPM44 or TPM1?

3. Also, Effective Interest Rate is being generated correctly in ftr_create but the calculations are happening basis the coupon rate provided in FWZZ. Does SAP calculations work on the above mentioned discounting future cash flows basis effective interest rate?

Please help.

Regards,

Namrata