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Former Member
Sep 20, 2012 at 03:55 AM

missing valuation of hedged item

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Dear Expert,

I have some queries on hedged accounting as follows:

1) after hedging relationship is established, at month-end, hedging
instrument and hedged item need to MTM.

The valuation with reset posting entries, for example cash flow hedge, should be as follows

hedging instrument

Dr./Cr. Hedge reserve - cash flow 80

Dr./Cr. Unrealized FX gain (loss) on derivative 20

Cr./Dr. Derivative liability / asset 100

and

hedged Item

Dr./Cr. Hedged asset / liability 100

Cr./Dr. Hedge reserve - cash flow 80

Cr./Dr. Unrealized FX gain (loss) on derivative 20

and then reset it.

However system doesnot generate the valuation of hedged item.

Am I understood correctly? or SAP works this way (without valuation of hedged item).

2) Or I have to change PMP to handle gain/loss handling as "Hedging accounting (underlying transaction)" for the hedged item?

to have valuation of hedged item posted?

Please kindly advise.

Thank you.

PNS