update type and condition type confuse

[Former Member]

for stock dividend, in FWZZ, I find it is a condition type, but TPM12, I find dividend is a update type, I understand update type is accounting related, so why SAP

introduce condition type, is it redundant with update type?

besides SAP standard condition/update type, which are the condition type and update type we need to configure and customize in the area of securities-Bond?

[lisa_savinovich]

Hello Robin,

Condition types and update types are linked.  For Securities, you assign update types to condition types.

IMG Path Treasury and Risk Management>Transaction Manager>Securities>Position Management>Securities Account Management>Assign Update Types to Condition Types.

Regards,

Lisa

[Former Member]

Hi,

Thanks, I understand there is a linkage, I'm asking the fundamental difference between the two,

also condition type can be further assigned to the group and transaction type.

so

why SAP

introduce condition type? what's the use of it? can I customize a new update type without introducing a additional condition type?  is it redundant with update type?

besides SAP standard condition/update type, which are the condition type and update type we need to configure and customize in the area of securities-Bond?

[lisa_savinovich]

Hi,

Conditions allow the user to define how the cash flow of the security is organized.  When creating a new condition type you assign a financial/mathematical calculation category such as inflow, outflow, interest, dividend, etc…  In addition, the user must indicate if there is a reference condition type.  The calculation category classifies calculation and posting rules used in processing conditions.   The user needs to group the condition types needed for each product type via a condition group.  When assigning the condition types, you need to also consider the sequence of conditions for screens and in evaluations.   If a product type has variable interest, then the group will need a condition type for interest rate adjustment that references the interest rate condition.

Standard Condition types

100 Interest (percentage-quoted)

101 Variable interest

111 Dividend

113 Bonus

116 Profit distribution

118 Repayment rate

119 Repayment price

133 Additional payment

134 Interest (unit-quoted)

209 Interest rate adjustment

263 Full repayment upon maturity

Update types pass information about flows to accounting via the link to posting specifications.  Each update type is also assigned a usage such as transaction management, securities account management, derived business transactions, etc…

New condition types can be created using financial/mathematical calculation categories.  Not all update types have a condition type: i.e. update types for purchase, issue placement, sale do not have condition types.  The update type is not redundant. 

As for bonds and what type of condition types are needed, it depends on the type of bond: fixed, variable, drawable (installment), zero, etc… For example bonds with installment repayments need a condition for installment repayments, final repayments, and repayment rate.  What types of bonds will your company being investing in or issuing? 

Regards,

Lisa

[Former Member]

since you mentioned that update type is organization of  cash flow, then my question becomes difference between condition type and flow type like interest also manages the cash flow?

so is there any standard condition type not passing to accounting?

[lisa_savinovich]

Hello Robin,

Flow Types relate to transaction management.  At the configuration step Define Flow Types, you maintain the flow type.  Main flows such as purchase, sale, issue placement, and issue redemption are required to have a specific flow category while many flows have the category other flow/conditions.  These main flows do not have a condition type.  The next key step for flow types is the assignment to a transaction type.

It is important to note that flow types and condition types are used differently in the areas of Treasury & Risk Management and my comments above between the different “types” were from the Securities perspective as your question noted stock dividends and bonds.  For example, Money Market product types do not use condition groups while Securities product types do: i.e. Money Market has the step Assign Condition Types to Transaction Type and Securities has the step Assign Condition Types to Condition Groups.  The steps Define Flow Types and Define Condition Types for Money Market and Securities have different settings as well.

Yes there are condition types that do not pass to Accounting such as repayment rate and interest rate adjustment.

In addition, please remember to award points if you find your question answered or information shared helpful.

Best regards,

Lisa