Collateral Terms to Determine Scope of Collateral Agreement 

Definition

The framework for determining scope of collateralization for receivables assigned to collateral agreements.

 

Use

The scope of a collateral agreement is determined using the following attributes:

●     Declaration of Purpose of a Collateral Agreement

●     Portions of a Collateral Agreement

●     Details of Receivables Assigned to Collateral Agreement

 

The declaration of purpose determines the extent of collateralization possible and whether automatic or manual assignments can be set for assigning receivables. The collateral agreement portions determine the parts of collateral agreement available for collateralizing receivables. The assignment of receivables determines how much collateralization is required by the assigned receivables.

 

Graphical Representation of Collateral Terms

 

Structure

The collateral terms are determined in the Portions and Collateral Scope tab pages of a collateral agreement.

 

Collateral agreement portions

The collateral agreement portions are divisions of the value of a collateral agreement. In Collateral Management, you assign portions for collateralizing receivables. You can therefore logically divide the value of a collateral agreement in order to enable assignments to multiple receivables and their portions.

You can assign more than one receivables to the same collateral agreement portion. There are however restrictions on assignment of a receivable and its portions to the same collateral agreement portion. For detailed information, see

Overalp in Receivable Amount to be Collateralized

 

Restrictions on a collateral agreement portion can also be used for restricting certain portions of collateral agreement from collateralization. For example, if certail value of a collateral agreement has been assigned for use by third-party, you can specify an appropriate portion restriction and block the portion. For detailed information,

Portion Restrictions

 

Rules

The Rules sub-section appears only if a wide declaration of purpose is determined for the collateral agreement. The rules are defined for each collateral agreement portion.

 

In this section, you can specify the criteria using which the system generates automatic assignments to receivables. You can use one or more of the following criteria:

○     Business partner

○     Product set of the receivables

○     Receivable organizational unit

○     Currency of the receivables

 

Collateral scope

The details of the receivables and the collateral agreement portions for which you want to maintain assignments can be entered in this tab page. Enter values in this section only if you want to manually assign the receivables to the collateral agreements.

 

For detailed information on how to assign receivables to collateral agreements, see

Assigning Receivables to Collateral Agreements