Assessment Value 

Use

This function calculates the collateral agreement value that the system uses for all internal collateral processes including the calculation functions. The system calculates the assessment value according to both, the maximum risk and the current risk of the collateralized receivables.

 

The system also uses the assessment value in specific scenarios such as:

 

●     Calculation of the lending limit for a guarantee (as the guarantees cannot be assigned to collateral objects for which lending limits can be determined) does not have any asset / collateral object to be charged).

 

●     Distribution of the liability of a pool agreement (in the event of liquidation) to the pool banks. The system uses the ranking ratio to distribute the assessment value of the collateral agreement to the pool banks. You can maintain proportional, equal or any other ranking ratios for the pool banks.

 

●     Calculation of prior charges (according to current risk) if the value of collateralized receivables (according to the current risk) is not available. In such a scenario, the system considers the value for prior charges as equal to the assessment value of the collateral agreement.

 

●     Calculation of the interest amount for capitalized charges of real estate liens. You can include the capitalized interest in the assessment value for the collateral agreement.

The standard system does not provide calculation functions for capitalized charges. You can calculate the interest amount in an external valuation system and add the amount to the assessment value manually.

 

●     Determination of the value of a trust order (created for a real estate lien) as the assessment value for a collateral agreement.

The system considers the value of a trust order as the assessment value only if the trust order is assigned to a real estate lien of the own bank. If a trust order is assigned to an external real estate lien, the system considers the value of the trust order as prior charge and does not include the value in the calculation functions.

 

●     In the calculation of the value for back-up collateral agreements. The value of a back up collateral agreement is calculated as the minimum from the assessment value of the collateral agreement and the lending limit of the asset (collateral object) charged by the collateral agreement.

 

Prerequisites

You must specify a valuation type in the Customizing for Collateral Management by choosing SAP Banking ® Collateral Management ® Collateral Agreement ® Define Collateral Agreement Types.

 

You can select from the following valuation types:

●     Percentage asset value for transfers or assignments where the value of the collateral agreement depends on the value of the collateral object that is charged.

●     Assessment amount if you want to enter the value of the collateral agreement manually.

●     Percentage receivable value in the scenario of guarantees, where the value of the collateral agreement is a percentage of the receivable value.

 

Activities

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The system calculates the assessment value using one of the following equations :

Valuation Type	Scenario	Assessment Value is Equal To
Percentage asset value		Minimum of (charge * lending value of the asset * percentage of the asset value) AND (assessment amount)
Assessment amount	Any collateral agreement except guarantees	Assessment amount
	Fixed liability guarantees	Assessment amount
	Default liability guarantees	Percentage of receivables
Percentage receivable value	Normal guarantee where guarantee rate is specified	Sum of receivables * (guarantee rate / 100)
	Fixed liability guarantee or indemnity bond where guarantee rate is specified	Minimum [(sum of receivables * (guarantee rate / 100) and (assessment amount)
	Normal guarantee, fixed liability guarantee or indemnity bond where guarantee rate is not specified	Minimum (sum of receivables and assessment amount)

Example

The following example illustrates the calculation of assessment value for a collateral agreement with a valuation type percentage of asset value:

Asset 1(finished goods) charged by a collateral agreement (transfer) Lending value= 10,000 Asset part amount percentage = 80% Percentage of asset value specified in the collateral agreement = 100%. Assessment value = 10000*80%*100*=8000