Exposure Management 2.0
This article is to provide basic process of how exposure management work in SAP- Treasury. For configuration please refer help.sap.com articles.
The new Exposure Management 2.0 enables you to manage exposure items for open commodity items and open currency items. In the Hedge Accounting for Exposures, you can map the hedging of commodity price risks using the corresponding hedging transactions in the Transaction Manager.
1.FTREX1: Create Raw exposure
In the below example I have created raw exposure for brass. In many cases, a commodity comprises several other commodities that bear the actual price risk. This is the case with brass for example. (FTREX7) to map such a scenario in the system.
2. FTREX2: select the ID and Initial release
Once released, the Position created based on split of the brass item.
3. FTREX12: Please check the unhedged item.
4. THMEX: Create hedge plan
5. FTR_CREATE Create forward contract/deal for USD for hedging relationship
6. THMEX: Assigned hedging relationship
7 FTREX12, Please transfer the un hedge item from exposure to hedge Management.
Once transferred successfully, the amount will be reflect in Hedge item field. Please refer hedged and unhedge field.
8. Please check OB08 setting for USD to EUR
9. THM80: Effective measurement calculation.
Tips: Exposure Activity Type The exposure activity type is a required entry when you create a raw exposure. Sub-raw exposures created for a raw exposure take the value of the exposure values in line with what you enter here. The exposure activity type specifies a number of key settings that determine how raw exposures behave and how their data is stored.
In exposure management, only the basic data relating to your operative business transactions is stored in a raw format known in the system as a raw exposure. A raw exposure is a simple mapping of an operative business transaction.
Sub raw exposure
All information relating to financial risks is stored in sub raw exposures. Here, a distinction is made between foreign currency risks and commodity price risks. Sub raw exposures form part of a raw exposure. A raw exposure can contain several sub raw exposures.
Raw exposures, as a total, represent the financial risk associated with your operative transaction. The total risk position is known as an exposure position, which comprises several sub raw exposures.
Differentiation and exposure transactions
Differentiation enables you to define how risks are divided. Here, the sub raw exposures are initially converted into a temporary intermediate format. They then become exposure transactions and are used to create exposure positions.
Exposure position flow
Exposure transactions are used to create exposure position flows, which, in turn, create the exposure position. An exposure position generally contains several exposure position flows.
Exposure position value
The exposure position value is the total value of the exposure position.flows for one exposure position on a particular key date.
PS:above example was created in IDES system for this post. Coming soon 2nd post in Exposure Management 2.0
Hi, I have missed out to update the screenshot of TPM60 and TPM1. Please note this process will be followed by step 8. Once you complete above process you can proceed with THM80 and thereafter.
OCI posting profit and loss will be done base on TPM60 and TPM1.
Blog simple and super clear. Nice work!
Thank you !
I am following you on TRM space and likes your blog.
Appreciate and thanks for this blog as well...
Can you please share a blog on Hedging/ Hedge plan-for forward contracts. And system config steps. Will be of great help.
Do you know if there is a way to transfer Financial Accounting documents such as vendor invoices in foreign currency into Exposure Management and automatically create a raw exposure or an exposure item?