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Object documentation Pending Transactions 

Use

According to IAS 39.30, a ’regular way’ purchase or sale of financial assets should be recognized using either trade date accounting or settlement date accounting. You should select the method to be used for each category of financial instruments. After you have chosen the method you must use it consistently for all the financial assets belonging to this category.

Holding Categories

Time of Financial Reporting Process

Originated Receivable

Trade date or settlement date (choice optional)

Held for Trading

Trade date or settlement date (choice optional)

Available for Sale (AfS)

Trade date or settlement date (choice optional)

Held to Maturity

Trade date or settlement date (choice optional)

(Other Payables)

Settlement date (only)

Financial Instruments

Time of Financial Reporting Process

Derivatives*)

Trade date (only)

*) Derivatives are categorized as HfT but they are always entered on the balanced sheet for the trade date.

A transaction is considered unsettled if its settlement date is after its trade date. A transaction is said to be in an unsettled status if it is between the trade date and the settlement date. Although the transaction is expected to be settled, this has yet to be confirmed.

According to the IAS, unsettled transactions must also be reported at the end of each period. The IAS solution requires this kind of transaction to be delivered at least two times:

  • Once as an unsettled transaction on the trade date.
  • Once as a settled transaction on the settlement date.

Note that it is necessary to deliver a transaction that is still unsettled to be able to report it at the end of the current period. Because, however, this transaction has yet to be settled, it must be reset on the first day of the following period.

All the characteristics that are needed to process unsettled transactions are described in the Optional Characteristics for Controlling Processing in Accounting chapter in the Posting External Business Transactions documentation. The system decides if a reset is necessary using the value you have specified in the header characteristic for unsettled transactions in the IMG activity Derive Business Transaction Reset.

The reset for unsettled transactions can be either:

  • automatically generated or
  • delivered by the source system.

You can decide which procedure you would prefer in the Control Business Transaction Reset IMG activity.

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An unsettled transaction must have a reset date. The reset date must be the first day of the following period. The unsettled transaction can thus be reported at the end of the current period.

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The reset data is used as the posting date for all resets (that is, both automatically generated resets and resets delivered by the source system). The reset date is, therefore, either taken from the selection screen or the business transaction (if they have been filled).

According to the procedure for handling transactions that have yet to be settled, a financial position with the defining characteristic Pending Position: Yes is never subject to amortization.

For the following examples it is assumed that the unsettled transactions are only delivered for the valuation key dates.

Prerequisites

The business transactions are entered and posted in the source system. The source systems supply the SDL with single transactions (including details on their value and their positions). Transaction data is delivered at least twice for unsettled transactions: At least once as the business transaction with the Unsettled Position: Yes defining characteristic for posting the transaction as an unsettled transaction, and once again as the business transaction Unsettled Position: No for posting it as a settled transaction.

It is also possible for the user to deliver unsettled transactions on a daily basis. It is important to note that these transactions can only be reset by delivering corresponding reset transactions from the source system.

Structure

New Position Key Figure

With regard to the posting logic, unsettled or pending transactions are not posted in two steps using clearing key figures as is normally the case for settled transactions. When posting the external business transaction, the transaction amount is posted directly to the position component: acquisition value pending key figure. This key figure belongs to the financial position journal, yet is not included in the book value. However, you can still include such a position in the key data valuation and determine the net income.

Note

When you derive the posting key figure type, you can choose whether the transaction amount of a business transaction is posted to the position clearing for value key figure (for the later derived posting to the acquisition value key figure) or posted directly to the acquisition value pending key figure. You can then derive the appropriate key figure type from the item type and indicator pending (customer-specific characteristic) source fields.

Example:

The write-up amount is determined as follows: Fair value – (book value + unsettled acquisition value).

When deriving posting key figures in Customizing, you have to specify (using the settled/unsettled indicator) if the inflow/outflow is to be posted to the acquisition value or the unsettled acquisition value.

Example:

  If the indicator is set to unsettled, then the posting is made to the unsettled acquisition value.

  If the indicator is set to settled, then the posting is made to the acquisition value.

This process renders any special treatment of unsettled transactions in the balance processing rule set unnecessary.

Since unsettled transactions are not posted in two steps by means of clearing key figures, you do not have to run the calculation steps of a calculation procedure for them. However, since they are from the same business transaction category as settled transactions, the system also triggers the Update Secondary Business Transactions process. Consequently, you must always derive an elementary calculation procedure that cannot contain steps.

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To derive an elementary calculation procedure for pending transactions, create a separate derivation step with the condition indicator pending = yes. In this step, the same (empty) procedure can then be derived using an entry for all business transactions.

Defining Characteristic of the Financial Position at the Valuation Level

Unsettled transactions are posted to a separate financial position. They have the characteristic Pending Position: Yes as a defining characteristic at the valuation level. The realized transaction with the defining characteristic Pending Position: No at the valuation level is posted to a different financial position.

Consequently, two financial position objects are needed; the first has the defining characteristic Pending Position: Yes, the second, Pending Position: No. This means that only one financial position class is necessary.

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The pending transaction and the settled transaction to be delivered later must be posted to different financial positions. To ensure this, the customer-specific characteristic "indicator pending" must be generated as a defining characteristic at valuation level for the financial position.

Business Transaction: Purchase or Sale with the Defining Characteristic Pending Position: Yes

The business transactions Sale or Purchase with the defining characteristic Pending Position: Yes at the valuation level are delivered to Accounting from the SDL. The pending transactions are entered for the trade date; the sort key is the trade date.

The purchase business transaction with the defining characteristic Pending Position: Yes at valuation level is posted at the acquisition price.

No derived business transactions or realizations are generated for the posting of a "sale" business transaction with the defining characteristic Pending Position: Yes at valuation level.

Business Transaction: Key Date Valuation

If fair value changes, the key date valuation for the internal business transaction is posted either affecting or not affect net income, according to how the financial instrument has been categorized.

A financial position with the defining characteristic Pending Position: Yes cannot be amortized.

You can make the appropriate settings in Customizing to ensure that this procedure is only used for unsettled positions.

Business Transaction: Reset Key Date Valuation

The key date valuation must be reset by the system the day after it is posted. In the case of business transactions in AfS, the instrument valuation is reset against the valuation reserve. In the case of business transactions in HFT, it is reset in the income statement in the subsequent period.

Business Transaction: Reset Purchase or Sale with Defining Characteristic Pending Position: Yes

When the key date valuation has been reset, a “purchase/sale” business transaction having at the valuation level the defining characteristic Pending Position: Yes must be reset. The reset document is posted when the unsettled transaction is delivered as part of the secondary business transaction update.

Alternatively, the transaction can be reset using a business transaction from the source system. (Note: This business transaction cannot be a reversal .) In this case, you need to make the appropriate settings in Customizing to prevent the delivered, unsettled transaction from being reset. The reset document is automatically reversed again if you select Reversal of Unsettled Transactions with automatic reset document.

As a result of the reset, the financial position for unsettled transactions shows a zero position. Transactions that remain unsettled on the next key date are redelivered by the source system.

Business Transaction: Purchase or Sale with Defining Characteristic Pending Position: No

The transactions are posted to the financial position for settled transactions and generate a change in the financial position.

Because, according to the IAS, assets posted on the settlement date are to be posted at the current fair value, it is necessary to carry out a same-day valuation of fair value. However, on the grounds of practicality, the financial instrument is delivered and posted with its acquisition value. Valuation does not take place until the next due valuation key date.

Realizations of profit or loss, resulting from sales, are posted in the current period for each settlement date.

The business transactions Sale or Purchase with the defining characteristic Pending Position: Yes at valuation level are delivered to Accounting from the SDL. Unsettled business transactions are entered on the trade date.

The purchase business transaction with the defining characteristic Pending Position: Yes is posted at the acquisition price.

No derived business transactions or realizations are generated for the posting of a "sale" business transaction with the defining characteristic Pending Position: Yes at valuation level.

Activities

Subledger Scenario

  To assign to a financial position the defining characteristic Pending Position, choose in the Implementation Guide Bank Analyzer ® Processes and Methods ® Accounting for Financial Products ® Before Generation ® Financial Positions ® Edit Financial Position Characteristics.

  A reset indicator controls the reset of unsettled transactions. In Customizing for Bank Analyzer, you can derive the reset indicator from the characteristics (source fields) of the external business transactions for pending transactions by choosing Bank Analyzer ® Processes and Methods ® Accounting for Financial Products ® After Generation ® Financial Position Processes ® Basic Settings ®Reset ® Derive Business Transaction Reset.

  In Customizing for Bank Analyzer, you can assign a BT type to a reset pending transactions reset BT type by choosing Bank Analyzer ® Processes and Methods ® Accounting for Financial Products ® After Generation ® Financial Position Processes ® Basic Settings ® Reset ® Control Business Transaction Reset.

  Unsettled transactions are posted with external business transaction postings. In doing so, you determine the reset date for external unsettled business transactions using the automatic reset. You ensure all unsettled transactions retain a reset date by specifying a reset date for all business transactions to be posted as the selection parameter for the report Post External Business Transactions.

You can also determine the reset date for each unsettled transaction on an individual basis. If the corresponding field is filled, the reset date from the business transaction is used instead of the reset date from the selection screen. If you want to do this, you must enter the reset date for external unsettled business transactions with delivered reset in each unsettled business transaction yourself. To do this, you must have a free characteristic in the header of the business transaction. You can use the characteristic /BA1/C55REFPD for this, or you can use your own characteristic. In both cases, you need to maintain the header fields assignment between the SDL and Accounting. In the Implementation Guide (IMG), choose Bank Analyzer ® Processes and Methods ® Accounting for Financial Products ® After Generation ® Financial Position Processes ® Processing of External Business Transactions ® Edit Characteristic Mapping for Header Fields of SDL Business Transactions.

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In this case, SAP recommends defining an additional business transaction class for unsettled transactions (with individual reset dates) for every existing business transaction class, which can also be used to depict unsettled transactions.

Merge Scenario (Balance Analyzer)

  To set the defining characteristic pending position for the financial position, choose Bank Analyzer ® Analytics ®Accounting: Merge Scenario ® Balance Analyzer ® Before Generation ® Objects ® Accounting Objects and Financial Positions ® Edit Characteristics for Financial Positions in the Implementation Guide (IMG).

  A reset indicator controls the reset of unsettled transactions. You can derive the reset indicator from the characteristics (source fields) of the external business transactions for pending transactions by choosing Bank Analyzer ® Analytics ® Accounting: Merge Scenario ® Balance Analyzer ® After Generation ® Accounting ® Processing for Business Transactions ® Basic Settings ®Reset ® Derive Business Transaction Reset in the Implementation Guide (IMG).

  You can assign a business transaction type to a reset pending transactions reset business transaction type by choosing in the Implementation Guide Bank Analyzer ® Analytics ® Accounting: Merge Scenario ® Balance Analyzer ® After Generation ® Accounting ® Processing for Business Transactions ® Basic Settings ® Reset ® Control Business Transaction Reset.

  Unsettled transactions are posted with external business transaction postings. In doing so, you determine the reset date for external unsettled business transactions using the automatic reset. You ensure all unsettled transactions retain a reset date by specifying a reset date for all business transactions to be posted as the selection parameter for the report Post External Business Transactions.

You can also determine the reset date for each unsettled transaction on an individual basis. If the corresponding field is filled, the reset date from the business transaction is used instead of the reset date from the selection screen. If you want to do this, you must enter the reset date for external unsettled business transactions with delivered reset in each unsettled business transaction yourself. To do this, you must have a free characteristic in the header of the business transaction. You can use the characteristic /BA1/C55REFPD for this, or you can use your own characteristic. In both cases, you need to maintain the header fields assignment between the SDL and Accounting. To do this, choose Bank Analyzer ® Analytics ® Accounting: Merge Scenario ® Balance Analyzer ® After Generation ® Accounting ® Processing for Business Transactions ® Processing of External Business Transactions ® Transfer of Business Transactions from Source Data Layer ® Edit Characteristic Mapping for Header Fields of SDL Business Transactions in the Implementation Guide (IMG).

This graphic is explained in the accompanying text 

In this case, SAP recommends defining an additional business transaction class for unsettled transactions (with individual reset dates) for every existing business transaction class, which can also be used to depict unsettled transactions.