Foreign exchange (FX) - daily cash settlement procedures

[Former Member]

Hi Guys.

We have a deal (Foreign exchange rate) that is settled every day. Every day the Bank post Gain or Loss in my bank account. In this case, the net Cash settlement is the difference between the cash settled at prior day and the current day.

Using the product type "60A - Foreign exchange (FX)", transaction "102 - Forward Transaction", the cash settlement is unique at the end of the contract.

Is it possible to setup a product that settles every day?

Thanks

Lucciano

[Former Member · Accepted solution]

Hi,

In this case, execute TPM1 against forward contract with Spot to Forward foreign currency valuation settings and without reset function. You can assign relevant bank account GL against this valuation and generate required posting entires.

Regards

Prasad AV

[Former Member · Accepted solution]

Prasad

I was thinking the same. I don't like this approach because TPM1 is to evaluate the currency and not to post a cash settlement.

Any way, thank you for your help.

Regards

Lucciano

[Former Member · Accepted solution]

Hi,

But in principle you are marking up/down the curreny value and pay/receive the difference for the currency position.

You can check with SAP paralley to get a program to mark up/down currency values and I am confident using TPM1 (Foreign Currency Forward/spot valuation) only you can get the function done in system.

Regards

Prasad AV

[lorenz_sperl · Accepted solution]

Hi,

...if I understand it correct, you want to have a kind of daily margining (transaction: PMVM) like for Futures. Unfortunately, there is no standard-functionality for FX-Futures available yet, but in case you want to go for this workaround, you could "misuse" e.g. an Index-Future to get a daily "cash-settlement" via Variation Margin.

Regards,

Lorenz

[Former Member · Accepted solution]

Guys. Only for your information.

I used the Product category "700 - Futures". In SAP there is a standard Product Type "70C" and it works very well.

Thank you for your help.

Lucciano