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Function documentationDistribution to Lending Ranges  Locate the document in its SAP Library structure

Use

This function distributes the collateral value to lending ranges to classify parts of the receivables that have been collateralized.

 

Features

The distribution of collateral value to lending ranges is characterized by the following:

 

  1. For lending range n, the distribution is as follows:

 

  1. If lending range n < collateral value, then the portion of collateral value in lending range = lending range n
  2. If lending range n > collateral value, then the portion of collateral value in lending range = collateral value

Note

Remaining collateral value n = collateral value – lending range n

 

  1. For lending ranges n+1, the distribution is as follows:

 

  1. If lending range n+1 < remaining collateral value n, then portion of collateral value in lending range n+1 = lending range n+1
  2. If lending range n+1 > remaining collateral value n, then the portion of collateral value in lending range n+1 = remaining collateral value n+1.

Note

Remaining collateral value n+1 = remaining collateral value n – lending range n+1  The process of distribution continues till all the lending ranges are exhausted.

 

Example

The following example illustrates the distribution of collateral value to lending ranges:

Collateral agreement 1 is assigned to collateral object1

Collateral value for collateral agreement 1 = 7000

 

Collateral object 1:

Asset object value = 10000

Safety discount = 10%

Lending value = 10000 – (10000 * 10%) = 9000.

Lending rates: 60% (1), 70% (2), and 80% (3)

Lending limits: 5400 (1); 6300 (2) and 7200 (3)

Lending ranges: 5400 (1); 900 (2) and 900 (3)

 

Distribution of Collateral value to Lending Range:

...

       1.      Lending Range 1: 5400

...

Lending range 1 < collateral value

Distribution of collateral value = Lending range 1

= 5400 (collateral agreement 1)

Remaining collateral value 1 = 7000 – 5400 = 1600

 

       2.      Lending Range 2: 900

Lending range 2 < remaining collateral value 1

Distribution of collateral value = lending range 2

= 900 (collateral agreement 1)

Remaining collateral value 2 = 1600 – 900 = 700

 

       3.      Lending Range 3: 900

Lending range 3 > remaining collateral value 2

Distribution of collateral value = remaining collateral value 2

= 700 (collateral agreement 1)

Remaining lending range 3 = 900 – 700 = 200

 

 

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